The Clark Howard Podcast: Housing Market Update & New Considerations for Vehicle Purchases (06.23.25)

Release Date: June 23, 2025

Clark Howard returns with insightful discussions on the current housing and vehicle markets, addressing the challenges consumers face and providing actionable advice through listener questions. This episode delves into the shifting dynamics of the housing market, the turbulence in the vehicle industry, and offers guidance for making informed financial decisions in these sectors.

Housing Market Update

Clark Howard begins by examining the significant changes occurring in the housing market across the United States. He highlights that while certain regions like the Midwest and parts of New England continue to experience tight inventory, much of the rest of the country is witnessing a "frozen" housing market.

Key Points:

• Inventory Shortage: Economists estimate a shortage of 4 to 5 million housing units in the U.S., creating substantial challenges for potential buyers.

• Price Stagnation: After years of rapid price increases, home prices have largely plateaued. Only a few cities, such as Austin, Texas, have seen notable price declines.

• Regional Differences: While the Midwest and New England remain competitive with multiple offers on homes, other areas experience fewer bids, indicating a cooling off from the intense buying frenzy of previous years.

• Builder Incentives: In regions like the South and Southwest, builders are grappling with high unsold inventory. To attract buyers, they've introduced various financing deals, including subsidized loans to make homes more affordable.

Notable Quotes:

• "The housing market is in such an odd place right now because here we are short somewhere. Best estimates, they're really guesstimates by economists. They were short 4 to 5 million housing units in the US and that's enough to really be disruptive for buyers." – Clark Howard [00:53]

• "Builders of new homes... are offering a lot of deals right now. Number one on their list, they're offering subsidized financing on the home to turn the clock back several years, to give an interest rate that really makes a home more affordable by far than it would have been otherwise." – Clark Howard [06:53]

• "Frozen, frozen in much of the country. What's frozen mean? So you have sellers who have the house on the market at what was the price was maybe a year or two ago, but they have gotten their minds that their house is now worth what people were paying in a buying frenzy a year or two ago." – Clark Howard [07:02]

Listener Questions on Housing

1. Andrew from Iowa: Saving for a Down Payment

Question Overview: Andrew and his wife in their early twenties are looking to save for a down payment on a $250,000 house to avoid mortgage insurance. With a combined annual income of $75,000, they are concerned about the feasibility of saving $50,000.

Clark's Guidance:

• Prioritize Retirement Savings: Clark emphasizes the importance of continuing to contribute to a Roth IRA as a top priority, ensuring tax-free savings for the future.

• Alternative Mortgage Options: He suggests exploring flexible mortgage products like 80-10-10 or 80-15-5 loans, which allow for smaller down payments by combining primary and secondary mortgages.

• Government Programs: Mentions potential eligibility for FHA loans or specialized loans for rural areas through the Department of Agriculture.

Notable Quotes:

• "Roth is highest priority. You throw money into that Roth, you build up money tax free later..." – Clark Howard [08:16]

• "In markets where there's a lot of new home construction and that's where you got real power as a shopper, the used home market is frozen." – Clark Howard [07:38]

2. Nanette from Washington: Condo HOA Special Assessment

Question Overview: Nanette faces a $60,000 special assessment for major repairs in her condominium. She is torn between continuing to live in her current townhouse or selling it to avoid the assessment.

Clark's Guidance:

• Evaluate Financial Options: Clark advises considering a home equity line of credit (HELOC) to cover the special assessment, although it would come with higher interest rates.

• Lifestyle Considerations: He urges evaluating whether she can afford the increased monthly payments or if downsizing to a smaller rental is more viable.

• Market Impact: Suggests that special assessments might lower the selling price of her property, potentially offering financial relief if she chooses to sell.

Notable Quotes:

• "This is so ironic because last night I got stopped by somebody who just got hit with a hundred thousand dollars. Special assessment at the condo she's in." – Clark Howard [11:38]

• "Do you want to give up the lifestyle you have? Or if you keep the lifestyle you have, can you afford what would be that higher monthly payment?" – Clark Howard [14:10]

Vehicle Market Update

Clark shifts focus to the volatile vehicle market, discussing how recent tariffs have significantly impacted vehicle prices, especially for imported brands. He underscores the widening price gap between passenger cars and larger vehicles like SUVs and trucks due to shifting consumer preferences and manufacturing costs.

Key Points:

• Tariff Impact: Imported vehicles, particularly German brands like Mercedes and BMW, are experiencing substantial price hikes—$12,000 for Mercedes and $8,000 for BMW on average.

• Shifting Preferences: There's a notable consumer shift towards SUVs and pickup trucks, creating a significant price disparity compared to passenger cars.

• Affordability Concerns: The average cost of a new vehicle in the U.S. has risen to $48,000, though many options remain available below this threshold.

• Autonomous Vehicles: Clark speculates on the future with the advent of autonomous vehicles, suggesting a potential shift in vehicle ownership models.

Notable Quotes:

• "The car market is truly in turmoil right now. The tariffs that are being imposed on different consumers buying different brands are quite, quite large." – Clark Howard [18:49]

• "What you need to do is widen your funnel and rethink what you're interested in buying because... a new or used, the brand, the model, that's going to make a big difference in your life." – Clark Howard [23:00]

• "If you have a vehicle that's still in great shape, you know, we are now on the cusp of where we're moving to an era of autonomous vehicles, truly autonomous vehicles..." – Clark Howard [24:10]

Listener Questions on Vehicles

1. Jeffrey from Georgia: Construction Loan Payments

Question Overview: Jeffrey is building a new home and seeks the safest method to pay for construction loan draws. He inquires whether cashier's checks are safer than personal checks.

Clark's Guidance:

• Use Regular Checks: Clark affirms that regular checks are sufficient unless the contract specifies otherwise. He advises against mailing checks due to potential hassles and recommends handing them directly to the contractor.

Notable Quotes:

• "Don't mail checks anymore. Don't do it. The hassles that occur? Crazy. But in this case, handing a check to a contractor? Absolutely. Just fine." – Clark Howard [16:52]

2. Deirdre from North Carolina: Buying a Used SUV

Question Overview: Deirdre and her husband are planning to purchase a used medium-sized SUV without engaging in traditional dealerships. They seek advice on platforms like CarMax, Carvana, and Auto Direct.

Clark's Guidance:

• Non-Haggling Sellers: He highlights the growing market share of sellers who offer fixed prices without negotiation, providing guarantees like return periods.

• Market Timing: Advises waiting to purchase if possible, as recent panic buying influenced by tariffs has distorted the market. Suggests that allowing time may lead to better deals.

• Compare New vs. Used: Encourages comparing the cost of nearly new vehicles with used ones, as current market distortions may make new vehicles a better deal in some cases.

Notable Quotes:

• "The used vehicle market still has done the traditional way, what's called the grind where they're doing all the haggle with you..." – Clark Howard [24:38]

• "If you let some time move forward on the clock... there has been so much panic buying... you may find that the new will be an overall better purchase, better deal." – Clark Howard [27:12]

3. Jordan from Oklahoma: Purchasing a Sporty Used Car After an Accident

Question Overview: Jordan recently wrecked his car due to hydroplaning and is considering purchasing a sporty used car like a Mazda Miata or Subaru BRZ. He questions whether to buy a more expensive vehicle now or opt for a cheaper one and upgrade later.

Clark's Guidance:

• Insurance Considerations: Recommends checking insurance costs for desired models to ensure affordability.

• Financial Stability: Emphasizes the importance of maintaining savings and ensuring that vehicle expenses don't hinder financial stability.

• Long-Term Satisfaction: Suggests evaluating whether the higher-cost vehicle aligns with long-term financial goals and responsibilities.

Notable Quotes:

• "If you are saving a substantial amount of money automatically every month in a 401k... and you can still afford the vehicle, then you can consider buying one." – Clark Howard [28:00]

• "Make sure you're insurable at a price you're okay with, that you're saving money every month and that you still, after those two things, can afford the vehicle." – Clark Howard [28:10]

4. Susan from Georgia: Son-in-Law’s Bad Consumer Finance Deal on a Motorcycle

Question Overview: Susan is concerned about her future son-in-law, who secured a motorcycle loan with a high-interest rate without proper documentation. She seeks advice on how to handle his financial missteps before their upcoming marriage.

Clark's Guidance:

• Seek Credit Counseling: Urges her son-in-law to consult with a credit counselor to address his debt and financial management issues.

• Financial Responsibility: Stresses the importance of him taking responsibility for his debts to ensure a stable future for his growing family.

• Family Support: Advises Susan to support her daughter by encouraging her son-in-law to improve his financial habits, emphasizing patience and understanding.

Notable Quotes:

• "He needs to go to a credit counselor... find a legitimate credit counselor to talk all this through." – Clark Howard [30:05]

• "What we're about is you learning ways to save more, spend less and avoid getting ripped off. It's a process to get to where you live on less than what you make that you make smart financial decisions." – Clark Howard [30:30]

Conclusion

Clark Howard's comprehensive discussion offers valuable insights into navigating the current challenges in both the housing and vehicle markets. By addressing listener concerns with practical advice and highlighting key market trends, Clark empowers consumers to make informed financial decisions amidst economic uncertainties.

For more advice and information, listeners are encouraged to visit www.clark.com/askclark and engage with Team Clark through various platforms.