Housing Doesn’t Need Another Prediction. It Needs People Who Can Solve Problems

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I have lost track of how many times housing has supposedly been six months away from getting better.

There is always another forecast. Rates are going to come down in the spring. Buyers will return after some future event. Inventory will improve next year. The Fed will ease. Sellers will finally adjust. The lock-in effect will fade.

Some of those predictions may eventually turn out to be right. That isn’t really my point.

My concern is what happens while everybody waits.

The latest construction numbers aren’t encouraging. Census estimated total housing starts fell 12.4% in July to a seasonally adjusted annual rate of 1.239 million.

Single-family starts were estimated at an annualized 808,000 units, compared with a revised 897,000 in June. There is an important detail in that number that is easy to miss: Census says the month-to-month change in single-family starts was not statistically significant.

That is worth pointing out because I don’t think we help anybody by taking every preliminary government estimate and making it sound more certain than it is.

We don’t need to exaggerate the numbers to understand the broader problem. Housing activity remains difficult, and the Federal Reserve’s own staff recently described home-purchase mortgage activity as depressed.

Nobody working in this business needs a government report to tell them transactions have been difficult.

The affordability problem is real, and it is bigger than mortgage rates. Home prices are part of it. Property taxes are part of it. Homeowners insurance has become another serious affordability issue in many markets. Consumer debt matters. Income matters. The condition of the property matters. Builders are dealing with land, labor, materials, regulation and financing.

That is precisely why I get frustrated when the entire housing conversation gets boiled down to “when rates come down.”

What happens if they don’t come down as quickly as people hope?

Do we all just wait another year?

The better question for people who make their living in housing is what can be done with the transaction sitting in front of them right now.

I want to be careful with that because there is a bad version of this argument. I am not saying that every buyer can afford a house if the loan officer works harder, or that every overpriced listing can be saved with better marketing.

Some transactions should not happen.

If somebody is stretching beyond what they can reasonably afford, telling them to buy anyway is not a solution. If a seller insists on a number the market will not support, inventing a creative financing structure does not fix an unrealistic price. Sometimes professional advice means telling somebody no.

But I also see deals die because nobody bothered to look beyond the first obstacle.

A buyer may have been quoted one loan structure and never shown another legitimate option for which they qualify. Someone may be eligible for a down-payment assistance program nobody mentioned. A builder may be offering financing incentives that materially change the monthly cost compared with a resale property. A seller may be willing to provide a concession if someone actually explains why it could be more useful to a buyer than an equivalent reduction in price.

There are also homes with FHA- or VA-backed mortgages that may be assumable, provided the applicable program requirements are met, the buyer qualifies where required and the proper lender, servicer or agency approvals are obtained.

None of these is a universal answer. That is the point.

Housing happens one transaction at a time, and the answer is often different from one transaction to the next.

I think our industry became a little spoiled during the easiest years.

When financing was extremely inexpensive and homes were receiving multiple offers almost immediately, the market covered up a lot of weakness. You didn’t always have to be exceptional at explaining financing because buyers were already lined up. A property could have obvious flaws and still sell. Pricing mistakes were sometimes erased by demand.

A difficult market doesn’t give us that luxury.

The real estate agent who understands financing has an advantage today. The loan officer who understands the real estate contract has an advantage. The builder who understands the buyer’s monthly-payment problem has an advantage. The listing agent willing to have a difficult pricing conversation instead of saying whatever is necessary to win the listing has an advantage.

That is what a harder market does. It makes knowledge useful again.

It also requires professionals to work together better.

I have seen too many housing transactions treated as though everybody involved is operating in a separate business. The agent handles the house. The loan officer handles the mortgage. The title company handles title. The insurance agent shows up somewhere along the way.

Consumers do not experience the transaction that way.

To them it is one very large, very expensive decision where every moving part affects every other moving part.

If the insurance quote blows up the payment, that is a housing problem. If the appraisal comes in short, that is a financing and negotiation problem. If the seller concession is structured badly, that can become everybody’s problem.

The strongest professionals understand more than their individual lane.

That does not mean they practice outside their licenses or pretend to be experts in areas where they aren’t. It means they understand enough of the complete transaction to recognize a problem early and get the right person involved before it kills the deal.

And despite how difficult the market feels, transactions have not disappeared. Existing-home sales were still running at a seasonally adjusted annual rate of 4.06 million in July. That was down 1.7% from June, but more than four million annualized transactions is still a very large market.

The opportunity is not evenly distributed, and it certainly isn’t easy. But consumers are still buying and selling homes.

The gap between someone wanting to make a move and actually being able to complete the transaction is where much of the work is now.

This market needs people who know how to close that gap responsibly.

Government policy can help housing supply. Better permitting can help. More construction can help. Lower inflation can help. Better financing conditions would certainly help.

We should push for those things.

But I don’t think professionals should build their businesses around waiting for someone else to solve the market first.

Look at the buyer in front of you. Look at the seller. Look at the property, the financing and the actual numbers.

Sometimes the answer will be that the deal doesn’t work.

When it does work, however, it is increasingly going to be because somebody involved knew enough to see an answer that wasn’t obvious at first.

That is the kind of housing professional this market is rewarding.

And frankly, I think that is good for the industry.