Podcast Summary: Ask The Compound

Episode: Will Housing Prices Fall In 2026?

Date: December 3, 2025
Hosts/Guests: Ben Carlson (A), Duncan Hill (B), Bill Sweet (C)

Overview

In this special 200th episode, Ben Carlson and Duncan Hill—joined by recurring guest and resident tax expert Bill Sweet—field real questions from listeners about the state of the U.S. housing market, early retirement strategies centered on Roth IRAs, Gen Z’s love affair with Roth accounts, behavioral finance issues around saving versus spending, using home equity in retirement, and insights into the surprising financial behaviors of U.S. military members.

Discussion is lively, candid, and packed with data-driven insights, memorable anecdotes, and a healthy dose of humor, providing practical perspectives for both seasoned investors and those new to the world of personal finance.

Key Segments and Insights

1. Will Housing Prices Fall in 2026?

[02:57–11:38]

Key Points:

• Housing prices are at record highs since the pandemic, despite mortgage rates rising from sub-3% to over 6%. Ben calls it “the worst housing affordability we’ve ever seen.”

• Even with high rates persisting for years and “buyers going on strike,” national home prices haven't budged down.

• Listener Rob’s question: Will 2026 finally be the year housing prices fall? Redfin says sellers outnumber buyers by 37%.

• Ben points to Robert Shiller data: prices only fell 7 times in 76 years (since 1950), only during the 1990/91 S&L crisis and the 2008 crash, despite recessions.

• Price softening is evident in select markets (Austin, Punta Gorda, New Orleans, Cape Coral), where some have dropped 14–25% after booming over 70% during 2020–22.

  "I just like to caution people who are holding out hope for a housing price crash... housing prices rarely ever fall." – Ben ([05:20])

• Ben's base case: Expect widespread stagnation, not a crash. Regions that saw the biggest run-ups may see more declines; elsewhere, expect flatlining so that incomes can catch up.

• Mortgage rate declines could unlock demand—unless falling rates signal a recession, which might depress prices differently.

• Demographics: The 32–36 age group (peak home buyers) is the largest, creating a “floor” under housing demand.

  "Demographics probably put the floor under any heavy selling pressure." – Ben ([08:28])

Memorable Moment:

• "So, Duncan, your best bet is to probably move to southwest Florida." – Ben, after a deep-dive into regional housing market data ([09:00])

2. Early Retirement Strategies Using Roth IRAs

[11:40–15:55]

Key Points:

• Listener Ethan asks if a 50-year-old with $4M in Roth IRAs can live off their contributions before 59½, while simultaneously converting a $1M tax-deferred 401(k) to Roth in low tax brackets, thus avoiding major taxes/penalties.

• Bill Sweet, dubbed the "Roth Man," enthusiastically affirms the strategy:

  • Roth IRA withdrawal rules: Contributions come out first—anytime, tax/penalty-free.
  • "Benjamin" in the scenario can distribute his $1M in Roth basis at any age, using it for living expenses while converting the 401k.
  • This allows for tax optimization and penalty avoidance.

  "Ben, this concept is absolutely wild and I don't like it. I love it." – Bill Sweet ([13:24])

• Reminder: High Roth balances often due to big portfolio winners (e.g., "Did Nvidia have something to do with it?").

3. Gen Z and the Rise of Roth Accounts

[16:06–19:57]

Key Points:

• Fidelity finds 95% of Gen Z's retirement contributions now go to Roth accounts, versus 75% for Millennials and 66% for Gen X.

• 1 in 5 401k participants (and 20% of Gen Z) now use Roth 401(k)s.

• Hosts note the trend reflects both pop-finance social media and deeper understanding of compounding and tax-free growth.

• Roths are attractive for flexibility (withdraw contributions anytime), crucial for young people facing uncertain life expenses.

• Importantly, Roths pay off best when funded early in one's career (lowest tax rates, longest time to compound).

  "A Roth IRA will always pay off given long enough time. And you just, you don't have any longer timeframe than your early working years." – Bill Sweet ([19:01])

Memorable Moment:

• Bill: "I am shocked. I was 95%? ... I am frankly shocked and impressed." ([18:08])

• Duncan jokes about social media: “It’s Roth, it’s Roth, it’s Roth. It is, it’s very trendy right now too.” ([19:57])

4. The Psychology of Saving vs. Spending in Retirement

[21:51–27:29]

Key Points:

• Listener asks: Are retirees prudent or just overly conservative for not spending much of their wealth?

• Data: Even wealthy retirees (<$200k–$500k+) often spend only 12–27% of their portfolio over 18 years; most just spend the income, not principal.

• Hosts note the psychological hurdle from saver to spender is deeply ingrained.

• Real-life uncertainties (health care, longevity, bear markets) make caution rational, but can lead to under-enjoying wealth.

  "Saving is a skill. It's a habit. It develops over a lifetime...it's very, very hard to flip that switch and go from the accumulation phase to the distribution phase." – Bill Sweet ([24:39])

• Value of advisors is to encourage course corrections: “Perfect is the enemy of good… I’m a big proponent of good enough versus trying to be perfect and optimize.” – Ben ([25:45])

• In retirement, time is the most limited resource:

  "At some point, you run out of time faster than you run out of money.” – Bill ([27:08])

5. Selling Your Home to Rent in Retirement

[27:36–33:16]

Key Points:

• Listener Charles asks if selling a home in retirement (and renting instead) is a good idea.
• For most, primary residence is their biggest asset (especially below top 10% net worth).
• Ben and Bill note:
  • Selling unlocks equity, avoids future repair costs, and removes illiquidity.
  • Section 121 of the tax code: $250k (per person) capital gains exclusion for a primary residence.
  • Renting provides flexibility, less hassle, covers ongoing costs from the invested proceeds.
  • Downsizing and moving to a city (Bill’s personal plan: “move my ass to New York City!” ([31:03])) offers conveniences and reduces maintenance.
• Downsides: Rent inflation, possible forced moves. As Duncan says, “You don’t know if you’re still going to be in the same place in a year from now...”

Memorable Quotes:

• “Do you know what old people don’t want to do, Ben? In my 80s, I don’t want to be mowing my yard. I don’t want to be shoveling snow.” – Bill ([30:39])

6. Military Members and the Surprising Growth of Wealth

[33:40–39:19]

Key Points:

• Ben raises a WSJ article on military members day-trading and investing in stocks/crypto. Is this new?

• Bill, drawing from his own military experience, isn’t surprised:

  • Military has huge financial perks: free health insurance, tax-free housing, GI Bill (education), and traveling perks.
  • Young military have low living expenses, few financial responsibilities, and (in Bill’s words) long periods of boredom—making it easy to experiment with risk assets like stocks and crypto.
  • He points out it's actually a good time in life to “take risks with your finances.”

• Many now are transitioning into more traditional “boring Ben kind of stuff” like index funds after “getting it out of their system.”

  "These are people...taking risks with their lives. Yeah, they might take some risk-adjusted behavior with their portfolio too.” – Bill ([38:06])

Notable Quotes and Time Stamps

• “This is the worst housing affordability we’ve ever seen in this country.” — Ben ([00:00])
• “You can see that since 1950, there have been 11 recessions. So even when there’s a recession, it’s highly unlikely that housing prices will fall.” — Ben ([05:09])
• “If I was in Florida or Texas, I'd be offering, I'd put in lowball offers all over the place.” — Ben ([11:36])
• “[A Roth withdrawal strategy] is absolutely wild and I don’t like it. I love it.” — Bill ([13:24])
• “Roth is very trendy right now. So I think a lot of young people who probably have no idea what Roth even means are selecting it when they see it as an option.” — Duncan ([19:57])
• “Perfect is the enemy of good in these conversations and these decisions.” — Ben ([25:45])
• “At some point, you run out of time faster than you run out of money.” — Bill ([27:08])
• “In my 80s, I don’t want to be mowing my yard. I don’t want to be shoveling snow.” — Bill ([30:39])
• “You have long stretches of extreme boredom punctuated by moments of extreme terror.” — Bill on military life ([35:25])
• “People hate paying taxes more than they like making money.” — Bill ([40:22])

Conclusion

This episode delivers a wealth of actionable, level-headed advice for listeners navigating a strange housing market, considering early retirement optimization, wrestling with financial anxieties, and more. The conversation blends data, stories, and policy perspective with a distinctly human touch. Whether you rent or own, save or spend, just started working or are planning your 80s, Ask The Compound leaves you better equipped to handle what comes next.

Listen to the episode for the full experience and deeper discussion. Questions? Email askthecompoundshowmail.com or join the live chat Wednesdays at 1pm Eastern.