Housing Market Shift: Inventory Catapults Back, Buying Opportunities Grow

Home prices are falling fast in some prime real estate markets across the country while others remain stubbornly stuck. What’s the defining factor between a stable housing market and one where sellers are actively cutting prices? Housing inventory! This metric defined the 2020 - 2022 run-up in home prices, but the rubber band of demand is snapping back as buyer power grows, housing inventory rises, and investors get even better buying opportunities. Remember when people said, “I’ll buy when prices drop”? Well, now might be the time. ResiClub’s Lance Lambert joins us to provide a holistic view of housing inventory, prices, demand, and emerging opportunities. Lance walks through the most up-to-date data on where housing inventory is rising fast, where prices are quickly declining, and which markets are holding on as sellers remain in control. We’ll also talk about why homebuilding costs are about to JUMP and the reason Warren Buffett sold his homebuilding stocks shortly after buying them. Will construction slow down, limiting new inventory and leading us back into ultra-low supply? If so, this could push home prices higher, creating a prime opportunity for real estate investors. In This Episode We Cover: Is spiking inventory a worrying sign for the housing market, or are we merely normalizing? What to look at in your housing market to forecast whether prices will rise or fall Why are homebuilding costs about to JUMP, and could this lead to even more inventory problems? The new housing trend: Older renters, but could this mean more demand for rentals? And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube Apply to Be a BiggerPockets Real Estate Guest ResiClub: The cost breakdown for constructing a single-family home in 2024 ResiClub: Did Warren Buffett see this coming? Homebuilder margins face pressure in 2025 ResiClub: The vanishing young homebuyer: Median first-time homebuyer age jumps from 28 in 1991 to 38 in 2024 Invest in Private Market Real Estate with the Fundrise Flagship Fund Grab Dave’s Book, “Real Estate by the Numbers” Sign Up for the BiggerPockets Real Estate Newsletter Find an Investor-Friendly Agent in Your Area Inventory Is Key to a Stable Real Estate Market—Will It Recover? Join Lance’s Newsletter Connect with Dave Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1101 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dave Meyer?

  After years of a very tight housing market, more homes are finally coming up for sale, which means that anyone looking to buy a rental property or a primary home has more options to choose from and may be able to find better prices. We'll get into all the reasons behind this emerging trend and how you can leverage it to benefit your own portfolio on today's show.

• 0:25Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm Dave Meyer, Head of Real Estate Investing at BiggerPockets. My guest today on the show is Lance Lambert. Lance is co-founder and editor in chief of ResiClub, a really cool media company that tracks the US housing market. And Lance specializes in research and data, so I want to break down a few of the trends he's seeing in the housing market right now that may indicate whether it's a good time to buy real estate. We're going to talk about inventory trends, which I personally think are really the key to understanding the whole housing market. Because how many homes are available to buy is going to go a long way towards dictating whether you can find good deals or not. But the current inventory situation is a little bit confusing

• 1:08Dave Meyer?

  because it's very different in different regions. What we're seeing in Florida and Texas is almost entirely different than what we're seeing in the Midwest and Northeast. So we're going to dig into the data with Lance. He brought all his charts with him, and we'll use those to identify which cities and states across the US might be better buyer's markets than you're probably hearing about in the headlines. Then later in the show, we'll discuss a few other topics Lance has written about at ResiClub. He recently put out an article about the shrinking margins for home builders, which could have huge implications on the future of single-family home construction and subsequent inventory. And we'll also talk about the rising age of the median home buyer in America. Let's bring on Lance.

• 1:52Dave Meyer?

  Lance, welcome to the BiggerPockets Podcast. Thanks for joining us.

• 1:55Speaker 01

  Thank you for having me, Dave. Housing, housing, housing. There's always so much going on in the US housing market.

• 2:01Dave Meyer?

  There is so much going on and you do such a good job of summarizing and visualizing everything that's going on. I'm a charts geek and you put out some of the best charts, some of the best heat maps, everything out there. I'm excited to have you here.

• 2:14Speaker 01

  Yeah, and really excited too. I think BiggerPockets, you have a huge audience and in particular, Dave, I think you put out really good, uh, smart content.

• 2:23Dave Meyer?

  Oh, thank you. I really appreciate it. Well, let's jump into some of the inventory trends you're seeing right now. And just for our audience, if you're new to this concept of inventory, it's one of the more useful metrics in the housing market, at least in my mind, because it sort of measures the balance between supply and demand. There's tons of different ways you can look at it, but generally speaking, when inventory is stable, you have equal or relatively equal amounts of buyers and sellers in the market. When inventory is going up, that typically means that you have more sellers than buyers. And when inventory is going down, the reverse is true. So just wanted to provide a little bit of context there.

• 3:03Dave Meyer?

  But Lance, tell us a little bit about what trends you're seeing in inventory right now.

• 3:09Speaker 01

  So that's exactly it, is that active inventory, not new listings, active inventory, it's the equilibrium of supply and demand in the market. So actives can rise, active inventory, even if the number of listings coming on the market is very low. And the reason that it can rise is because demand could pull back so much, right? And that's kind of what we've seen in a lot of these Sunbelt markets, these pandemic boom darlings, right? These, uh, remote work booms, the short-term rental booms, right? Where there was a lot of people going into these markets to buy during the pandemic housing boom, there was a lot of migration in. And what that did is it drove up home prices even

• 3:50Speaker 01

  more than a lot of other markets saw. So, once rates moved up and the pandemic housing boom fizzled out, these markets were a little more strained relative to local fundamentals, right? And because the migration in, let's take a place like Florida, they were going from between summer of 21 and summer of 22, seeing over 300,000 people on a net basis moving into the state. Now it's only around 60K plus. So it's still in positive, but it's not as much as before. And so what that means is the market has to rely more on local incomes to support where prices got to. That becomes a little bit of a trouble. And so it creates

• 4:33Speaker 01

  a greater demand shock on the market, pushes active inventory up more. Now, the other factor is a lot of these Sunbelt markets are more of what economists would call supply elastic, right? Where they have more home building levels, more multifamily home building levels. And so when you're in this constrained affordability environment, and you still have that supply coming in, what has to be moved, right? And so builders do a little bit of the affordability adjustments, you know, these mortgage rate buy downs, right? And so instead of people having to get a 7% rate, 6.5% average 30-year fixed mortgage rate, they could go to a builder, maybe get 4.5, maybe get even like 3 something from

• 5:16Speaker 01

  some of these builders, some of the deals they're running. And so what that does is it pulls the attention of some of the buyers who would have otherwise wanted to buy an existing or resale home, and it pulls them to the new market. And so the existing and resale market has a harder time selling, and so the active inventory builds. And so this active inventory is really a great metric for the supply-demand equilibrium. And if you see active inventory move down quickly, that's suggesting a market that's heating up, greater competition, sellers gaining power. And if you see a market where active inventory is moving up beyond the normal seasonality, that suggests a market where buyers are gaining power. And if it happens very quickly, buyers are gaining a lot of

• 5:59Speaker 01

  power. And so I'm going to share my screen and actually show some of the data across the country.

• 6:07Dave Meyer?

  And for everyone who's listening to this on audio, we will describe it to you in great detail.

• 6:13Speaker 01

  Okay, so this is active inventory across the country now versus the same month in 2019. And so the same month in 2019, I kind of use as a proxy for the previous norm for the housing market. And so the housing market went through the boom where active inventory across the country was down 60, 50, 70, 80% in a lot of markets very quickly from pre-pandemic 2019 levels. And then once rates shot up, active inventory on a national level has been building, but some markets have gotten back and above, parts of Texas, parts of Florida, right? Parts of the Mountain West.

• 6:54Speaker 01

  And then there's also this big swath still of like Minnesota, Wisconsin, Illinois, Michigan, Indiana, Ohio, and then almost all the Northeast, including also West Virginia and Virginia, that are still very tight for active inventory. And those are the markets where sellers have the most power. So if you look at this map and you see the dark brown, that's where sellers have the most power. And if you see the green, that's where buyers have the most power. On a state level, you'll see that four states, Texas, Florida, Colorado, and Tennessee, are now above pre-pandemic levels. Utah, Arizona, Idaho, Nebraska, Hawaii, Washington State, they're almost pretty much there.

• 7:39Speaker 01

  And then you have some other markets that are kind of getting close. But if you go down, you look at a place like Connecticut where, you know, there are 3,100 homes for sale at the end of February. And if you go back to February 2019, there were 14,000. So right now there are 3,000 homes for sale in the whole state of Connecticut, and there were 14,000 homes for sale pre-pandemic. And so places like New Jersey, Connecticut, Rhode Island, Illinois, Vermont, sellers, just in New Hampshire or Maine as well, sellers still have a lot of power. And there's still a lot of other states like that, Virginia, Massachusetts, Virginia, Pennsylvania, Wisconsin,

• 8:23Speaker 01

  where things are still very tight.

• 8:25Dave Meyer?

  So Lance, tell me, approaching pre-pandemic levels of inventory, which makes sense to me as a metric, but should that be seen as a good thing or a scary thing? For, I guess it depends on your perspective, but how do you interpret that?

• 8:40Speaker 01

  So I think the first thing to note is that we were in a very unhealthy housing market during the pandemic housing boom. Home prices went up 21% in 2021 alone, which is the most ever in US history for one single year, even more than any of the years during the inflationary spike of the 1970s on a nominal basis. And so that's not healthy, that's not sustainable. That's not how the world should operate long term, right? And so the market we're in is a market that is normalizing from an unsustainable increase in housing demand during the pandemic. During the pandemic housing boom, the Federal Reserve estimates that those first two years,

• 9:22Speaker 01

  housing demand went up so much that to match it, home construction housing starts would have needed to increase 300%. That's not possible. Housing starts cannot go from like 1.4 to then 2.8 million, and that's only 100% increase, then up to 4 million and then over 5 million. You can't go from 1.4 million housing starts to over 5 million. Housing starts in a short period of time, there are hard constraints on the market for supply, right? The labor force, only so many people know how to do windows, carpet, construction, the foundation, all of that, right? And then there's the supply chain dynamics where it takes years to build a supply chain for lumber,

• 10:06Speaker 01

  for windows, for concrete, all of that. And so housing starts moving up 10, 20, 30% is a lot, let alone to go up 300%. And so housing supply, the actual number of units in the country, is not elastic like demand is. Housing demand can move very quickly. And so during the pandemic housing boom, housing demand surges. That's all the stimulus, the ultra-low rates, of course, the work-from-home arbitrage effect, all of that at play. And so as that occurs, the market cannot absorb all of that demand. And so the demand that got to transact was the demand that paid the most, right? And so prices overheated and that's how the market decided who got to actually purchase.

• 10:51Speaker 01

  And so coming out of that, we're in this period where the housing market is trying to normalize, right? And so that normalization in some markets like Austin, normalization means correction. Home prices actually coming down and some other parts of the country, it hasn't quite been that. It's just been active inventory starting to build. But to answer your question, I think zoomed out, we don't want to stay where we were in 2021 long-term, but in the short term, for some people in the industry, different stakeholders, it can be jarring.

• 11:25Dave Meyer?

  Lance, thank you so much for this explanation. I do want to ask you how all of this will impact housing prices, but first we have to take a quick break. And before we go to break, just wanted to say that this week's bigger news is brought to you by the Fundrise Flagship Fund. Invest in private market real estate with the Fundrise Flagship Fund. You could check it out at fundrise.com/pockets to learn more. We'll be right back.

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• 14:49Dave Meyer?

  Everyone, welcome back to the BiggerPockets Podcast. I'm here with Lance Lambert. We are talking all about the, what I think is fascinating topic of real estate inventory. We've been talking about some of the overall trends and how inventory has been shifting upward over the last couple of years and that there's basically four states right now that have inventory above pre-pandemic levels with another couple of states getting close. Lance, I'm curious, do you think that these markets where inventory is either closer above 2019 levels have a risk of price declines? I mean, some of them are already seeing price declines, but do you think that's sort of like a trend that's going to continue?

• 15:29Speaker 01

  Yeah, so my view of active inventory is that when you see big increases in active inventory, especially if they happen quickly, that is a market where the absorption usually has shifted, right? Where homes are having a harder time selling and so they're beginning to pile up on the market. It's not necessarily that there's a lot of people in Florida right now who are selling, but it's that people who are selling in Florida are having a harder time selling. And so the active inventory, what is available in any given month is rising. And so as that has occurred, we've already seen pricing weakness in Florida. And so here I have the markets that have enough condos to be measured for condo prices. And you can

• 16:12Speaker 01

  see that condo prices are pretty much down across the state and you can go through a lot of these markets down 8, 10, 9%, 13%. And it's had the most impact on older condo buildings. So condo buildings built in the aughts are weaker for pricing than condos built in the 2010s. Condos built in the 1990s are seeing bigger price drops than condos built in the aughts. Condos built in the 80s are seeing bigger price drops than condos built in the 90s. And you can just keep going back every decade. And then for the single family market for Florida, it's a little more resilient in some pockets, especially some of the northern Florida markets. It's been a little bit more stable or it's been

• 16:54Speaker 01

  a little bit more balanced as a market. But in southwest Florida, places like Sarasota, Cape Coral, Fort Myers, Pinagorda, we've seen price declines outright for single family as well. And a part of that is that South Florida saw a bigger pullback in net domestic migration once the pandemic housing boom ended. And actually, some of the pockets of Southwest Florida temporarily saw net outmigration. Some of the people who moved in during the pandemic moved out. So that created a greater demand shock. And so we're seeing prices fall in some pockets of Florida. But if you go across the country, most of the country is still seeing prices either

• 17:39Speaker 01

  go sideways or a little bit up. And a lot of that is like the Northeast and the Midwest. But it's definitely not anything close to what you saw during the pandemic housing boom.

• 17:51Dave Meyer?

  So I just want to rehash some of what Lance showed us here in case you're listening. Basically, Lance, the condo market, when you pulled that up, he was showing a map in Florida, all red. You know, there was basically only Miami, and the Miami area was showing blue. And then when you look at the single-family homes, you know, it was mostly Southwest Florida that was red. There was pockets of growth there in Tallahassee, Gainesville, Orlando, that sort of thing. How closely do you think this map correlates to the inventory question that we were talking about earlier? Like, if you overlay these, would they look almost exactly the same, where you could sort of use inventory to predict these future price declines?

• 18:33Speaker 01

  Here is a map of where inventory is back to or above pre-pandemic levels, and that's the green areas. And then this is how home prices have shifted since their respective peak in 2022. And you will see that the markets where inventory is back to or above pre-pandemic levels correlates with where prices have declined from their peak. And that the places where things have stayed very tight, active inventory has not built up much, those are the places where prices have actually moved up a little bit more since their 2022 peak.

• 19:09Dave Meyer?

  One last question here on inventory, Lance. I'm like anyone else. I see these constant headlines that are like, inventory is up 80% or 70% in any given market, and it's looking over maybe the last year. How important do you think that recent trend is? Because as you said, inventory was down so far during the pandemic. Like, does it matter if it's shifting from last year to this year? Or is the comparison to right now to 2019 really what matters?

• 19:38Speaker 01

  I do think that 2019 is a really great reference point. And it's not necessarily that a market today that gets back to 2019 is back to being a 2019 market. Right? Because what took them to getting back to 2019 was the fact that the market was so unhealthy and that a lot of the homes for sale couldn't transact. So I'm not saying that a market that is back to pre pandemic levels today is the same as a 2019 normal market, but it is a market that has seen softening and weakness to get back to that level. And so the interpretation of inventory over time is going to change.

• 20:20Speaker 01

  And that this 2019 reference point, if you interpret it a year, two, three, four years down the road, it could shift, but I do think it is a really good reference point. And what I would be looking at in my market is pretty much this, like looking at the actual number of inventory for sale and seeing how it shifted. And if it's moving very quickly, especially in a local market, that's telling you there's weakness there. But if you're in a market where it's like, let's take Kansas. This is like a slow grind back up. Well, that's probably a market where sellers still have more power than what you're hearing

• 21:01Speaker 01

  about in these headlines, even given that the percentage change for inventory might rank kind of high.

• 21:07Dave Meyer?

  That's super helpful and a really important takeaway for everyone in our audience right now. As we've been talking about, inventory is super important. Like, if there's one metric, honestly, that you're going to track to understand what's going on in your market, this is the one I'd look at. And as Lance said, comparing it to 2019 to 2025, if you're going to do just one thing, that might be the thing for you to do to understand your market health. Lance and his company, Resi Club, do a great job of Doing that, but there's tons of other places where you can also just look up this data for free. We talk about them a lot on the show, but you can just also just Google this and check this out. It's a great, great thing for you to do for yourself.

• 21:43Speaker 01

  And if they sign up for the Resi Club newsletter, go to resiclubanalytics.com. In my free list, I send out the state inventory datas like, like this every month to people.

• 21:53Dave Meyer?

  Awesome. All right. We do need to take a quick break, but when we come back, I want to ask you Lance, about a couple of other articles unrelated to inventory that you wrote about construction costs and first time home buyers. We'll be right back. For my wife's birthday, I wanted to make her a new website for her landscape design business. So I researched a lot of different options. I tried out a couple, but honestly, it was really overwhelming. It was pretty time consuming and still the site wasn't coming out the way I wanted it to. Then I tried Hostinger and everything was super simple. I asked Hostinger's AI to build a clean site for her business and it had a working version up in minutes.

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• 27:25Dave Meyer?

  Welcome back to the BiggerPockets Podcast. I'm here with Resi Club's Lance Lambert. We're talking all sorts of different things in the housing market. We just had a long, great conversation about inventory, but I want to shift gears here a little bit, Lance. Talk about two different articles you wrote about construction in general. The first one was about cost breakdowns for single-family homes and just the general cost of construction, which to me is so important with the future, you know, long-term trajectory of the housing market. So can you just fill us in a little bit about construction costs and trends in that industry?

• 27:59Speaker 01

  Yes. So, construction costs Just like home prices went up a lot during the pandemic housing boom and there hasn't been much relief for construction costs. The one area of relief is like framing lumber, but the problem there is that while it's coming off those peaks that it's all in 21 and 2022, is that there is a tariff scare, right? And it's not just what Trump's talking about doing. It's also the fact that we have this system for softwood lumber coming from Canada that goes through an automatic review for duties and the duties this year are expected to double.

• 28:41Speaker 01

  And that's, that's without anything else that Trump does. So if Trump were to actually put tariffs on Canada, that would put even more pressure upward on lumber. And even if he doesn't, there's still going to be upward pressure on lumber and that's been one of the few areas of relief. And so in terms of construction costs, up 40, 50% for most categories that you look at.

• 29:04Dave Meyer?

  Yeah. So do you have any expectation or idea of how tariffs will impact this further? I mean, do you think it will be exactly equal to the amount of the tariff? Like if it's a 20% increase on appliances, let's just say, do you think that will correspond almost one to one?

• 29:22Speaker 01

  It's hard to say. And it's also hard to say what actually is going to incur with the tariffs.

• 29:29Dave Meyer?

  Right. Yeah, we just don't know at this point.

• 29:31Speaker 01

  Exactly. Like I think a lot of what's been talked about for China, I think that's probably going to go into effect. But what Trump is talking about with Mexico and Canada, those might be bargaining chips for other types of deals that we'll reach with them. Maybe it's getting Canada and Mexico to actually also put on tariffs on China. So it's really hard to tell what would actually happen. But if it does occur, it would be a shock for different categories. And even if it doesn't, I think there is still a shock coming for lumber and for wood over the next year. So if you look at the breakdowns from builders, and this is over the past two years, the biggest category is framing, including the roof. And a lot of that

• 30:16Speaker 01

  is the lumber. And so you can see that's been one of the few areas they've actually seen relief. But now that's one of the ones that they're going to get some upward pressure on.

• 30:25Dave Meyer?

  All right. So we're looking here at Lance's chart and what we're seeing is that lumber, yeah, was one of the places that there was actually some relief from 2022 to 2024. But we're looking at electricals, plumbing, HVAC, wall finishing, cabinets, roofing. And so this just really makes me wonder about trends in construction right now because if rates stay high, right, isn't there a reasonable case that construction is going to slow down again, even for a single family?

• 30:52Speaker 01

  So one of the challenges here is that when inflation was roaring in '21 into '22, builders had a lot of pricing power, right? And so as things were running up, they could just pass it to the consumer. There was like an unlimited number amount of housing demand out there, essentially is what it felt like to builders. But now that shifted. Builders don't have all the pricing power. But on the other side, they're getting squeezed by some of these higher components. And what's occurring here is that between some of these markets like Texas and Florida, where they're having to spend more on incentives and maybe bring down net effective prices, and then these increase on the inputs, it's compressing

• 31:36Speaker 01

  the margins. And so it could, in some of these markets, begin to have an impact on activity for a single family.

• 31:44Dave Meyer?

  So that actually reminds me of another article of yours that I read about builders' margins shrinking. Can you just tell us a little bit more about that?

• 31:52Speaker 01

  Yeah. So what's been happening to builders is that during the pandemic housing boom, they had pretty much unlimited pricing power and their margins soared. A lot of these builders, if you go look at their earnings reports, had the greatest ever profit margins during the pandemic housing boom, as they just had so much pricing power, even though a lot of these costs were rising. But what we've seen since then is margin compression from a lot of the builders, is they've done affordability adjustments to kind of meet the market. But now we're starting to see a little bit of another leg down for some of these margins at some of these builders. And so Lennar, their forecast is that Q1 will be their lowest growth

• 32:35Speaker 01

  Margin in a decade. And then even the most resilient builder out there, the publicly traded, which is Toll Brothers, and their typical home is around a million dollars. Even they are seeing a bit more margin compression than was expected. This is what Toll Brothers CEO said the other day. While demand has been solid in our first quarter, we've seen mixed results so far for the spring season. And when I talk to a lot of the people in my network, spring's not necessarily as good as they were hoping for. It doesn't necessarily mean that it's a terrible spring, but it's not necessarily as good as they were hoping for so far as of the end of February into early March.

• 33:16Dave Meyer?

  Got it. Okay.

• 33:16Speaker 01

  And so what is this being? From a homebuyer perspective this year, it means that in builder communities where the builders are set on trying to maintain sales. So they'll do adjustments to kind of meet the market. And in these places, like in pockets of Florida and Texas, where there's a lot of spec inventory and they got to move it. It means that the retail buyer could see some deals from some of these builders in the markets where they have more spec inventory. And then from a seller's perspective, if you're in these markets where builders have a lot of spec inventory that they're trying to sell at discounts, it's going to create some pressure for you and greater cooling and softening in your own market.

• 34:00Speaker 01

  As some of those buyers who would have otherwise looked at the resale in existing market, turn their attention to the new market.

• 34:07Dave Meyer?

  Last topic I wanted to cover today on your reporting is just about the median age of a first time homebuyer. I thought this was super interesting. Can you just give us the headline here?

• 34:17Speaker 01

  Yeah. So over the past three decades, we've seen the median first time homebuyer age go from 28 years in 1991 to now as of 2024, 38. So back in 1991, the typical first time homebuyer in the US was 28 years old. In 2024, the typical first time homebuyer is 38. So over three decades, it's went up 10 years.

• 34:45Speaker 01

  I've had some people message me after I put this out that, oh Lance, that's only because life expectancies went up so much. And I pulled the numbers for life expectancy. It's only went up less than two years during this 30 year period. And so it's not all because of life expectancy. And I think what's occurring is a few factors. One is we have a secular shift happening, not just in the US, but across developed worlds, where people are going to school longer, they are marrying later, they are having kids later. And when they do have kids, they're having fewer kids. And then they're buying homes later. And then the other factor is that people are also

• 35:26Speaker 01

  living longer, right? And this is more for like the distribution of household size, which we're seeing an increase in one household sizes and two household sizes. And everything else is decreasing. But the composition of the homeowner is getting shifted out as people live longer as well. And so what we're seeing here is that the typical age of repeat buyers has gone up from 42 to 61. And all home buyers has gone up from 35 to 56. And the other factor, of course, as well, which has kind of pushed this up over the past two years, has been the deterioration in affordability. And so a lot of the people who are older,

• 36:09Speaker 01

  they have a lot of equity. Forty percent of the US homeowners, their primary residents, they don't have a mortgage. It's paid off. And so for those folks, they don't have a lock and effective rates. If they want to sell and buy something else, more of them are doing it. But on the, on the first time side, the people who are financing it, more likely to finance it, more of them have pulled back from the market than the all cash buyers because of where rates have gone to. And that's put additional upward pressure on the median first time homebuyer age, sending it from just a couple of years ago at 33 up to now 38.

• 36:44Dave Meyer?

  It's just so interesting, these big cultural dynamics. And I think for anyone listening who doesn't yet own a home, you get it, right? Affordability is low. And that's making it really challenging to buy a home. I'm curious, Lance, from an investor's perspective, do you think this changes in any way the makeup, the demand for rental properties? Because if people are waiting longer to buy a home, does this mean we're going to have more families renting single-family homes or apartments? That's been sort of on my mind about my own investing decisions.

• 37:17Speaker 01

  You know, it's tough to say. I think there was that assumption by some when rates kind of went up a lot in '22. And it's like, well, a lot of people are not going to be able to afford now, and so they'll have to rent. But then there was the factor of often historically, when the purchase market softens, the rental market also softens. Because some of the dynamics that led to the softening in purchase led to the softening in rentals. And of course, there was a lot of the supply that was financed, a lot of the multifamily projects that were financed during the period of ultra-low rates. And so as that kind of rolled in and all those completions came in, that kind of softened the market for rentals and kind of negated some of the effects that some people were hoping from the softening of the purchase market.

• 38:01Speaker 01

  But as we look out, I think the biggest thing is, if we see the completions for multifamily roll over, and in some markets roll over harder, I think that will begin to put some positive momentum into the rental market. And maybe some of these other effects that we're talking about here could have some impact. I think the biggest impact is really the secular impact, which is a lot of people rented in their 20s, right? That's been historically true for a long time. And a lot of that product was multifamily. But as people are spending more of their 30s and 40s renting, that's creating greater opportunities for the single-family rental market and for also kind of that mixed product, some of these townhomes, right?

• 38:45Speaker 01

  And I think that's why we've seen so much expansion over the past decade in the builds-rent side of the business.

• 38:52Dave Meyer?

  That's super, yeah. Thank you for explaining that, Lance. Because if you all have heard me talk about the upside area and sort of the different ways to look at investing right now and evaluating deals, one of my theses is about future rent growth. And although I'm not saying it's a good thing that housing prices are unaffordable and people are going to be renting longer, it does just seem that the data is pointing that way. And it does make me wonder, and I think as investors, it's something to think about what type of housing units might be more in demand in the future, based on some of these trends. So that's sort of why I wanted to get at that. And thank you for explaining that to us, Lance. All right. Well, that is what we got for today's show. Lance, thank you so much. There's three really interesting topics. You covered them

• 39:37Dave Meyer?

  all in great detail, really great explanations. Thank you for sharing your reporting and information with us here today.

• 39:43Speaker 01

  Yeah, thank you for having me, Dave. And if people want to follow my work, get some of my stories in their inbox, they can go to resiclubanalytics.com, just put in their email and they'll start getting these data stories.

• 39:54Dave Meyer?

  Awesome. And thank you all so much for listening. We'll see you next time.