Chief Economist Mark Zandi on What to Do With Your Money Right Now

Summary

Podcast Summary
HerMoney with Jean Chatzky
Episode: Chief Economist Mark Zandi on What to Do With Your Money Right Now
Date: January 23, 2026

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Overview
In this episode, Jean Chatzky welcomes Mark Zandi, Chief Economist at Moody’s Analytics, for a broad-ranging discussion on the current economic climate, investment strategy amidst global volatility, housing affordability, and practical advice for women (and everyone) striving for financial stability. Together, they break down what recent economic news actually means for individuals’ money moves, how the U.S. position in the global economy impacts everyday investors, and thoughtful approaches to both home buying and generational wealth transfer. The conversation is candid, level-headed, and peppered with humor and specific, actionable insights.

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Key Discussion Points & Insights

1. Navigating Economic Uncertainty: Should You Change Anything?

• Ignore the Noise—Stay the Course

  • Advice for Most Individuals: Despite swirling financial headlines, Zandi stresses that unless you absolutely need to, “don’t even look” at the day-to-day market volatility, especially if your investing horizon is 10+ years.
    • Notable Quote (03:26):

      “Most folks shouldn’t even look. Don’t even look. The best strategy is…do nothing.” —Mark Zandi

  • Long-Term Perspective: Continue investing regularly (dollar-cost averaging), don’t try to time the market, and only make changes if your financial goals or circumstances materially shift.

• Rising Anti-American Economic Sentiment

  • Global trade tensions, tariffs, and U.S. policy shifts are fostering a sense of “deglobalization.”
  • This trend, Zandi suggests, likely will mean lower growth and returns for U.S. investors in the long run.
    • Notable Quote (05:01):

      “The U.S. economy is pulling away from the rest of the world and therefore the rest of the world is pulling away from us…that will diminish the U.S. economy long run.” —Mark Zandi

  • Investment Implication: Consider adding more global diversification to long-term portfolios as U.S. influence wanes.

2. Advice for Pre-Retirees & Retirees

• Investment strategies should acknowledge a shorter time horizon:
  • Systematically balance portfolio away from equities as retirement nears, but avoid knee-jerk, emotional moves.
    • Notable Quote (07:00):

      “You should be diversifying your holdings away from equity. But you should do that in a very systematic way, kind of a programmatic way, and not in an emotional way.” —Mark Zandi

3. The Housing Crunch: What’s Happening and What Can Be Done?

• Affordability Stuck: Rates, Prices, and Incomes

  • High mortgage rates (~6%), stagnant prices, and slow income gains mean many are priced out or “stuck.”
    • Notable Quote (11:26):

      “There’s three ways affordability can change…The mortgage rate is sitting...around 6%. That’s not going anywhere…So that’s not going to help…House prices...are kind of flattish, right?...The only way we’re going to restore affordability…the only way, is incomes.” —Mark Zandi

  • Zandi forecasts that restoring affordability will be a slow, decade-long process as incomes (hopefully) outpace prices and rates stabilize.

• Is Home Ownership Still Important?

  • Zandi strongly believes home ownership remains a powerful way to build wealth, particularly due to the leveraged nature of mortgages.
    • Notable Quote (14:10):

      “To not buy a home is a mistake. I think from a financial investment perspective you should do it if you’re able to afford to get into the home in the first place.” —Mark Zandi

• What If Prices Don’t Double?

  • Even with inflation-level growth, being a homeowner can still provide a solid, if not spectacular, return.

• Are Innovative Mortgage Products the Solution?

  • Trends like 50-year mortgages or mortgage portability won’t solve affordability short term and may actually exacerbate higher prices by fueling demand instead of fixing supply shortages.
    • Notable Quote (17:35):

      “If you do something that juices up demand and it bumps up against a lack of supply, that means just higher house prices. It doesn’t improve affordability.” —Mark Zandi

• Unlocking Housing Supply

  • Zandi advocates for policy changes to encourage more middle-income housing supply, such as expanding tax credits traditionally limited to low-income housing.
  • He highlights the need to raise the capital gains exclusion on home sales for seniors to encourage downsizing and free up housing stock.
    • Notable Quote (19:40):

      “If I were king… I probably would increase the capital gains exclusion on home sales for seniors...I think you’d get a lot of seniors, empty nesters selling those big homes and helping unlock that existing market.” —Mark Zandi

4. Policy Solutions: The American Housing and Economic Mobility Act

• Zandi supports legislation like Senator Warren’s proposal to invest in new housing construction through existing trust funds.
• The key is focusing on increasing supply, not just demand, to address the real root of the housing crisis.
  • Notable Quote (23:26):

    “The problem isn’t we don’t want to juice up demand if there’s no supply. We want more supply.” —Mark Zandi

5. Generational Wealth Transfer & “Die With Zero” Philosophy

• Zandi encourages parents with resources to consider helping the next generation financially—whether via down payment gifts or intra-family loans—earlier rather than waiting for inheritance.
• Inspired by the book “Die With Zero,” Zandi sees value in putting wealth to use to directly help loved ones when it matters most.
  • Notable Quote (25:31):

    “Why do you want to die with anything?...Why not do it at a time when you’re really helping your kids out and your other family members out?” —Mark Zandi

• Careful planning (wills, trusts, long-term care reserves) is crucial, as is ensuring you don’t “screw with incentives” for adult children.

6. Downsizing Decisions & Housing Mobility for Seniors

• Many empty nesters are “locking up” housing stock by remaining in homes bigger than they need, often due to unfavorable capital gains tax rules.
• Zandi anticipates a surge in downsizing and increased supply as boomers age and require different living arrangements.
  • Notable Quote (27:33):

    “There’s [an] extraordinary large number of empty nesters…sitting in homes that are just much larger than they need and that is locking things up.” —Mark Zandi

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Memorable Moments & Quotes with Timestamps

• “Most folks shouldn’t even look. Don’t even look. The best strategy is…do nothing.” (03:26) —Mark Zandi
• “The U.S. economy is pulling away from the rest of the world and therefore the rest of the world is pulling away from us…that will diminish the U.S. economy long run.” (05:01) —Mark Zandi
• “You should be diversifying your holdings away from equity. But…not in an emotional way.” (07:00) —Mark Zandi
• “There’s three ways affordability can change…The mortgage rate is sitting...around 6%.” (11:26) —Mark Zandi
• “To not buy a home is a mistake…if you’re able to afford to get into the home.” (14:10) —Mark Zandi
• “If you do something that juices up demand and it bumps up against a lack of supply, that means just higher house prices. It doesn’t improve affordability.” (17:35) —Mark Zandi
• “If I were king… I probably would increase the capital gains exclusion on home sales for seniors…” (19:40) —Mark Zandi
• “The problem isn’t we don’t want to juice up demand if there’s no supply. We want more supply.” (23:26) —Mark Zandi
• “Why do you want to die with anything?...Why not do it at a time when you’re really helping your kids out?” (25:31) —Mark Zandi
• “There’s [an] extraordinary large number of empty nesters…sitting in homes that are just much larger than they need and that is locking things up.” (27:33) —Mark Zandi

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Important Timestamps

• [03:26] — Why most investors should “do nothing” during volatility
• [05:01] — On U.S. economic “deglobalization” and impact on markets
• [07:00] — Adjusting investments for pre-retirees/retirees
• [11:26] — Housing affordability’s three-part problem
• [14:10] — The long-term financial importance of homeownership
• [17:35] — Why new mortgage products won’t fix affordability now
• [19:40] — Tax reform to incentivize downsizing and housing mobility
• [23:26] — Supporting the American Housing and Economic Mobility Act
• [25:31] — Generational wealth transfer and “die with zero”
• [27:33] — The downsizing dilemma and future of senior housing

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Summary Tone and Closing
The conversation is frank but optimistic, emphasizing patience, long-term planning, and a focus on policies and personal decisions that build broad-based financial security—even in turbulent times. Zandi’s advice is reassuring, grounded in data and experience, and tailored to the unique economic and life circumstances women (and their families) often face.

Transcript

[Mark Zandi]

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[Jean Chatzky]

The.

[Mark Zandi]

US Is pulling away from the rest of the world quickly on every level. You can see that in trade with the tariffs. You can see that in immigration policy, export controls, sanctions, investment restrictions, visas. You know, on and on and on. The US Economy is pulling away from the rest of the world, and therefore the rest of the world is pulling away from us.

[Jean Chatzky]

Hey everyone. Welcome to Her Money. I'm Jean Chatsky and oh my gosh, am I so happy that Mark Zandi is with me today. Because like all of you, I have just had the television on this week, watching financial news, flipping back and forth between all the channels, trying to wrap my brain around what's going on in the world, what it means for the markets, but mostly what it means for you and your money. Because there are so many things swirling at such a high level. There's so much uncertainty about whether any of these things are actually going to happen. It makes it really hard to do anything except sit tight, which may be the right move. But quite frankly, Mark is a much better person to ask about that than I am. Mark Zandi is no stranger to any of you. He is chief economist at Moody's analytics, one of the country's most trusted voices on economic policy, the forces shaping our financial lives, housing. Because I know that you all have a lot of questions about that, but Mark, I have never been more delighted to see you on my schedule.

[Mark Zandi]

Hey Gene, it's so good to be with you. You know, it's been a long time. I don't want to date either of us, but it's been, we've noticed for quite a long time, and it's always a pleasure to be able to have the opportunity to speak with you again. So thank you, thank you for the opportunity.

[Jean Chatzky]

Oh my gosh, thank you so much for being here. So let me just zoom way out and ask you how much of what is happening right now in the news is real enough for us to think about changing anything we're doing with our money?

[Mark Zandi]

Well, most, most folks shouldn't, shouldn't even look. You said, I've been watching tv, I won't even look. Don't even look. I mean, most people should have a, especially if you're in the stock market. If you're, most of us should have, if we have savings, some savings, we should be at least part of that. In the equity market, you should have a long horizon, meaning you're not worried about what happens. Certainly today, next month, next quarter, next year, you have a horizon of at least 10 years, maybe even longer. And so if that's the case, all these ups and downs and all arounds, all the drama, don't even pay attention to it. I wouldn't change a thing. The only thing you want to make sure of is that you keep on investing and keep putting money into the market and not trying to time things because that's, that's really a losing game. So the best strategy is, is the easiest, actually the easiest strategy that is do nothing.

[Jean Chatzky]

I was hearing and, and I will take your advice and turn off my television, but yesterday I was hearing a lot about this anti American trade and anti American sentiment and the fact that, you know, potentially that was responsible for a lot of this drag. And I'm wondering, even if all the talk about Greenland proves to be much ado about nothing and things do settle back down, do you get any sense that there is a growing anti American ism that might affect the markets in the long term?

[Mark Zandi]

Yeah, for sure. I think that the US is pulling away from the rest of the world quickly on every level. You can see that in trade with the tariffs. You can see that in immigration policy, export controls, sanctions, investment restrictions, visas, you know, on and on and on. The economy is, the US economy is pulling away from the rest of the world and therefore the rest of the world is pulling away from us. You know, not at least initially, not because they wanted to, but because they, the US was forcing them to. But now they're saying, look, this isn't working for us. And things like Greenland just reinforces that view. And so, yeah, the rest of the world is pulling away. And my humble opinion that's, that will diminish the US economy long run. Now, I don't know that I connect the dots back to let's sell stocks here in the US as an individual. But it might suggest that one should think over time about investing more broadly around the world because the rest of the world, I think, will start to operate on a different dynamic because it is increasingly independent of the US and the US Will be diminished by the fact that we are less globalized with the rest of the world. And you know, Gene, really, for the decades after World War II, up through President Trump's first term, we were globalizing, we were leading the way, we were integrating. There were winners and losers and all that. And that that was part of the reason why they're. We're now de globalizing because of the political ramifications of that. But the net impact of that was very positive, certain for stocks and equities. And so therefore, now that we're de globalizing and at a very rapid pace, that stands to reason there's going to be a weight on returns and will diminish economic growth going forward for sure.

[Jean Chatzky]

You mentioned that 10 year time horizon for people I know we've got a lot of listeners who are looking at retirement within that 10 year time span or even closer. Some may even be retired. Is the advice any different for them?

[Mark Zandi]

Yeah, I think it sounds like if you're thinking about it as carefully as you're suggesting, you probably have an investment advisor or someone who's helping you think through how to prepare for retirement. And I would expect that they would be advising that over time you adjust your overall portfolio of assets in a way that you reduce your exposure to the equity market because the equity market is historically more up and down and all around. And if you have a shorter term horizon than 10 years, you want to take that into account. So you should be diversifying your holdings away from equity. But you should do that in a very systematic way, kind of a programmatic way, and not in an emotional way. So you shouldn't be selling at a time like this, when everyone's selling. That's probably going to be a mistake at the end of the day. But just every so often you rebalance your portfolio and make sure that the percent of your portfolio, your holdings that are in equity are consistent with your risk tolerance, your age and your horizon.

[Jean Chatzky]

Let's turn a corner and talk a little bit about housing. There are so many people who I think are feeling very, very stuck in the housing market. Either stuck on the outside or stuck on the inside. The Washington Post wrote a story recently that more Americans now hold mortgages with interest rates above 6% than those who were lucky enough to lock in rates below 3%. But half of those mortgages are sort of sitting below 4%. And it kind of feels a little bit like a can't win situation for millennials and Gen Z who want to get in but can't find a house. And if they can find a house, it's at a higher mortgage rate. And for older people who maybe would like to move but have the same sort of conundrum, they've got such a good deal on where they are right now. We're going to take a very quick break. Back in a sec. You know, I have learned over the years that it's the small things, the ones we do every day, that make the biggest difference, whether it's how we spend, save, or take care of ourselves. That's why I love recommending AG1. There is no right time for better health. There's just now. Our Chief Content Officer Katherine Tuggle uses this every single day and she thinks you should try it too. She loves the berry flavor, but original citrus and tropical are all great. So pick your favorite. AG1 has over 50,000 verified 5 star reviews and comes with a 90 day money back guarantee. So go to drinkag1.comhermoney to get their best offer. For a limited time only, get a free ag1 duffel bag and free ag1 welcome kit with your first subscription order only while supplies last. That's drink ag1.com hermoney drink ag1.com hermoney comfort and confidence. That's what I look for in my underwear. And that's what Skims delivers. The cotton jersey full brief has become my daily go to no bunching, no riding up, no stretching out. It hugs in all the right ways. And not only that, they are soft, breathable and still look brand new after dozens of washes. And I'm obsessed with the fits everybody triangle Bralette. As someone who's always looking for that sweet spot between comfort and support, this one nailed it. It's flattering, flexible, and makes me feel put together even in my comfiest clothes. Skims has totally changed how I think about getting dressed. It's not just what's on the outside, it starts with the base. Shop my favorite bras and [e-mail] after you place your order. Be sure to let them know we sent you select podcast in the survey and be sure to select our show in the dropdown menu that follows. And if you're looking for the perfect Valentine's and if you're looking for the perfect gift for your Valentine or yourself, the skims Valentine's shop is now open. We are talking with Mark Zandi, chief economist at Moody's. Let's once again zoom out, then we'll zoom in.

[Mark Zandi]

Okay.

[Jean Chatzky]

What do you think is the future of housing? And housing affordability in America is going to slowly improve.

[Mark Zandi]

There's three ways affordability can change. Prices, house prices go up or down. Two is interest rates, the mortgage rate, and three is income, your income. And the mortgage rate is sitting well, at least before Greenland, it was sitting around 6%. It's now a little bit higher, but let's just say 6%. I think that's what you should. That's where mortgage rates should roughly be. They might get into the high fives, but you know, and they go up and down and all around, obviously, but depending on circumstance. But if you cut through the volatility, you know, I plan on 6%. So that's not going anywhere. That's not going to help to any significant degree, at least not in the long run. House prices, they're kind of flattish, right? Nationwide, in Philly, where we are, it's actually amazing how strong house price growth is. So if you're a homeowner in Philly, you're doing pretty well. But in parts of the south and the west, for various reasons, prices are weak. But nationwide they're flat. I don't think I count on any declines in house prices, and I'm not sure we really want to see that because there are all kinds of implications for homeowners in the economy. But let's say they just go flat ish for a while, kind of grow at the rate they have been growing over the last couple three years. That means the way we're going to restore affordability, the only way, is incomes. People's incomes have to increase, and they are. Over time, hopefully we don't go into recession and we get a job loss, because that'll set us back. But assuming that doesn't happen, incomes will steadily rise and improve, and over time, affordability will be restored. But the best forecast, the most prudent forecast would suggest that's going to take a long time. That's not going to happen next year. That's going to happen over a period of the next five to 10 years. So when we look back 10 years from now, if everything kind of sticks to the script I laid out, we should be back to a level of affordability that prevailed before the pandemic. So it's a slow process getting back to affordability.

[Jean Chatzky]

How important do you think home ownership is to building wealth over a lifetime? I had lunch yesterday with a reporter on our team, young woman who basically said they were very comfortable with the idea of never being a homeowner. And I just thought, whoa, like at their age, I was not comfortable with that idea. We moved so many times when I was a child and every single time my parents bought a house and it was responsible for a good chunk of what they amassed for retirement. I think the calculus has changed. But this idea that by the time you get to the end of the road, this paid off mortgage will be a nice chunk of cash that you can use for some later in life need has always been important to me.

[Mark Zandi]

I, I think a home is a critical investment for most middle income Americans. I mean, because it's a leveraged investment generally. Right. So I would take Philadelphia and the reason I know this gene is because I just wrote a piece for the Philadelphia Inquirer that'll be over the weekend on housing and whether it's time to buy. Yeah. So I did just a bit of a calculation. If you look at Philly house prices over the last decade, they doubled. So if you bought a home back in 2015 or 2016, today it's worth twice as much now. Let's say you put 20% down on that home back 10 years ago, your return is five fold. It's not one times, it's five times. Right. Because your, your investment, you're looking at your returns relative to the amount of cash you put up in your down payment. So you don't get that anywhere else. I mean, you know, it creates some risk if prices fall. And we saw that during the great financial crisis. But that's a outlier. And I don't, that's certainly not an issue for the woman you were talking to at lunch. She. I don't think that's the concern that she should have. So to not buy a home is a mistake. I think from a financial investment perspective you should do it if you're able to afford to get into the home in the first place. But it's a really good investment because it's leveraged investment stocks generally you don't leverage. If you leverage, that's pretty, you can do it. But I wouldn't recommend for most people given the risk. But for housing, obviously people get, most people get a mortgage certainly when they're starting out as a first time home buyer. And that's a great investment.

[Jean Chatzky]

Even if you back out the doubling of real estate in Philadelphia over over 10 years. I owned a home in New York that I bought in 2005 at the height I thought I am never going to get my money out of this house. I ended up actually making some money because I was able to sell it during the pandemic pop. Right. Otherwise I would have been flat at best on that house. And I still wasn't sorry because I had paid off the mortgage. But what if you don't get the doubling? What if instead you get inflation level growth? Does that still argue for buying a home?

[Mark Zandi]

It's not as compelling, no, for sure. It's still. I think the arithmetic is still pretty good. I mean, I still would you think of a home as an investment because of the return? Still will be attractive, but it's not a slam dunk. But Philly house prices doubled. So did national house prices, by the way.

[Jean Chatzky]

Right.

[Mark Zandi]

So you're the outlier sitting in New York with a home that didn't appreciate. Well, you said you got a pop during the pandemic, so you got your money. But that's unusual. And right now I think a prudent planner would count on house price growth on average. That's consistent with the growth in household income. Inflation's 2% per annum household income should be 4 to 5% per annum income growth. That's what you should expect to see, I think long run in most markets across the country. And that's what I would plan on. Some markets, you know, are going to be stronger, you have a sense they're going to be stronger. And some markets you have a sense they're going to be weaker. Maybe you take that into account. But on average that would be the calculation I would do.

[Jean Chatzky]

When young people look at homes and they think, okay, I've got a massive down payment and I've got to get in. Sometimes the prices look unaffordable. And for those reasons, we've been hearing about 50 year mortgages, we've been hearing about mortgage portability. Do you think any of these recently floated ideas have legs?

[Mark Zandi]

No, not in the current context. I mean, I think it's laudable to think about these things and maybe we can design new mortgage products and probably should design new mortgage products that would be helpful to home buyers in the future, but they're not going to solve the near term problem. These are these 50 year mortgage, the portable simple mortgage. Even if we wanted to go down that path, they wouldn't come to fruition anytime to help us out here in terms of the next five to 10 years. This is a, that's a long term kind of project. And I don't think this, that would be particularly helpful. And in the current context it could be somewhat counterproductive. Right, because the real problem in the housing market is there's just not enough supply both in the existing and the new market. So if you do something that juices up demand and it bumps up against a lack of supply, that means just higher house prices. It doesn't improve affordability. So if you really wanted to solve the problem of affordability using policy in the near term, something that has legs in the next year, two or three, you'd focus on the supply side of the market, I think. And so based on some of the work we've done, the largest shortages of housing are for what I call workforce housing rental and for sale. That's for middle income. These are nurses and teachers and folks that have kind of high middle income levels. That's where the shortage is most pronounced. And that's because at the high end of the housing market builders can make a lot of money. And so they've been put up a lot of homes and go back to Philly. There's a lot of big apartment towers that have gone up and there are no problem. There's a lot of too much space. You know, rents are soft. At the low end of the market, the so called affordable part of market, low income, you get a lot of tax subsidy, right? And so light tech low income housing tax rates. So you get a lot of supply there. It's not oversupplied. But you know, it's not screaming under supply. It's really that middle part of the market where builders can't make the money to build and they don't. There's no subsidy. So if you want to get more housing and solve the affordability problem faster, I would provide subsidy, take LIHTC low income housing tax credit and provide a tax credit for middle income housing and get more for that group. And then I think that would be more helpful in solving the problem. The other thing I would recommend in the existing market just to kind of unplug things is I would maybe you didn't ask me what I would do if I were king, but if I were king, I probably would increase the capital gains exclusion on home sales for seniors because that was those two capital gains exclusions were set back in 1997. They've not kept up with inflation or house prices. So they're for people that live in, on the coast in New York, Philly Chicago, California. They don't want to sell because they got this huge capital gains bill and they might, they just, they're just going to wait until they die be quits to the kids and the kids get a step up in their basis and therefore no capital gains tax. So I would increase even just double the exclusion that would be consistent with inflation over that period since 1997. I think you'd get a lot of seniors, empty nesters selling those big homes and helping unlock that existing market. So in a sense incenting more supply. More supply.

[Jean Chatzky]

It is such an important point. Yeah, I haven't thought about it that way but I write this column for AARP magazine where I help people with real issues and I have gotten a steady stream of questions about people who don't want to sell their homes. And that's exactly, that's exactly the reason when they threw out that number originally the capital gains exemption, it sounded like and it was at the time a really big number. But you're right, it has not kept pace. We're going to take a very quick break. When we come back, I want to talk about the Housing and Economic Mobility Act. You've written about that a bit and I want to sort of unpack that as well as the question of whether parents who have resources, who are thinking like I do, my kids might be better off having a little bit of my money now than when I die whether we should be helping this next generation along. Back in a sec. You know, my producer Hailey has a big goal for 2026. Finally building that travel fund she has been talking about for years. Real guilt free adventure money. But like any goal, it starts with a plan. And for that she is using Monarch. Managing your money doesn't have to be a struggle this year. Monarch is the all in one personal finance tool designed to make your life easier. It brings your entire financial life, budgeting accounts and investments, net worth and future planning together in one dashboard on your laptop or your phone. Start your new year on the right foot financially and get 50% off your monarch subscription with code Hermoney. Achieve your financial goals for good. Monarch is the all in one tool that makes proactive money management simple all year long. Use code [e-mail] for half off your first year. That's 50% off your first year at monarch.com with code hermoney. This episode is brought to you by Peloton. Break through the busiest time of year with the brand new Peloton Cross training Tread plus powered by Peloton IQ with real Time, guidance and endless ways to move. You can personalize your workouts and train with confidence, helping you reach your goals in less time. Let yourself run, lift, sculpt, push and go. Explore the new peloton cross training tread [e-mail] we are talking with Mark Zandi, Chief Economist at Moody's. Your research supports something called the American Housing and Economic Mobility act which would invest hundreds of billions of dollars into building more homes. Cutting red tape. What would this change actually on the ground and why this particular piece of legislation?

[Mark Zandi]

Yeah, this is legislation that Senator Warren of Massachusetts has put forward a number of years. It hasn't gained any traction in the Congress, but the idea is supply. We need more supply. So this would take trust fund money, housing trust fund money, cap mag money. These are sources of funding that you could use to help finance the construction of more homes. So it just goes to that point I was making earlier. The problem isn't we don't want to juice up demand if there's no supply. We want more supply. And this is a way to do that, to increase supply. So I, I'm all about the supply side. So I like anything that max of trying to improve the amount of homes that are out there. Manufactured housing also I know that's not important part of the housing stock in Philly or the northeast of California, but if you go to the south, southeast or Texas or the west, that's a big part of the housing stock. And there's things that we can do to increase supply of manufactured housing for those middle income, low income households. So any of that will help support supply. Count me in. I'm on board. Particularly if you can figure out how to pay for it. And in that particular legislation there is pay fors that pay for the funding.

[Jean Chatzky]

Before the break I mentioned this idea that you get to be, you know, in your 50s and your 60s and your 70s and you've got some money, you've, you've got a shorter roadway than you, than you did. And if you've got children and you see them struggling to get into their first home or with other costs of living, you think about as I do, whether you're better off passing along some money today, whether helping them now is the right thing to do, whether it's just gifting some money for a down payment or a friend of mine, her daughter bought an apartment and she gave her an interest free mortgage, which is another way to do it. What are your thoughts about this whole looming generational wealth transfer and the best way to handle It, Yeah, I think.

[Mark Zandi]

That I'm all for that. You know, there's this really good book, Die with Zero. You probably know better than we had.

[Jean Chatzky]

Bill on the show.

[Mark Zandi]

Yeah, very interesting fellow. And the book was well written and well articulated and it's kind of mind blowing. A wealth manager gave it to me. So you have to read this and it's an easy read. You should definitely read it with a lot of good examples. It makes a lot of sense to me. Right. I mean, why do you want to die with anything? So, you know, obviously it's scary because you don't know how long you're going to live and you got to make sure that you figure that out. But I do think there's a lot to the idea that you've got this massive amount of wealth sitting with folks that are like me, baby boomers in their 60s and 70s, now 80s, that will pass down. So why not do it at a time when you're really helping your kids out and your other family members out or other friends out for that matter. So I'm, I'm a big advocate of the die with zero kind of mentality. You have to really think about it. You have to be very careful and there's things you need to do in wills, trusts and all kinds of your medical care and all kinds of stuff. But that makes a lot of sense to me. Why do you want to die with your wealth when you could be helping your kids out? As long you don't, you're not screwing with incentives, Right. I mean, you want to make sure you're not messing with incentives, but once your kids are. My kids are in their late 20s, early 30s. The centers are already set, right?

[Jean Chatzky]

Yeah. And you don't want to mess with incentives. At the same time, you don't want to mess with your own long term care. How about the whole idea of downsizing smartly? It's been, I just think it's been a little bit of a more fraught decision than it used to be. Because housing prices went up, you could sell your place and maybe not save any money. Right. So as I look at the decision, I think it's not just, okay, do I want to stay in my community? It's, you know, how much smaller can I go? Can I get into a lower tax area? Maybe this is the time to sort of compromise on the school system in exchange for more services and somebody else to plow the snow that we're going to get this weekend.

[Mark Zandi]

Yeah, actually the numbers here are pretty compelling. I read a paper When I go back to that capital gains exclusion discussion we had, but there's extraordinary large number of empty nesters sitting at one or two people in the household now sitting in homes that are just much larger than they need and that is locking things up. I mean you got a lot of young people who are starting families in their 20s and 30s and they just can't find anything because the empty nesters are sitting on these homes. So I understand the economics behind and also there's a lot of non pecuniary reasons why one might want to stay in the home that they raise their kids in. I get it. I have the same, you know, sense of things. But you know, I think from a financial perspective it probably does make sense to kind of think about whether that's the right thing in the long run. I suspect the one thing that will happen is the boomers as they get even older and start to need different types of care and housing, that's when they might start to sell because the homes are living in just aren't conducive for people that are more elderly and have health care issues.

[Jean Chatzky]

Yeah. Well, I got to say I highly recommend city living. I think that this idea of, yeah, having an elevator and being able to walk half a block and being at a restaurant is unbelievable. Unbelievable. Mark, thank you so much for a wide ranging conversation. We will link to your podcast in the show notes so that everybody can find it as well. And I hope you enjoy the warmth.

[Mark Zandi]

Yeah, yeah. Thanks Gene. I really appreciate the opportunity.

[Jean Chatzky]

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