You had housing questions. An economist answered them.

Summary

Podcast Summary: The Indicator from Planet Money
Episode Title: You had housing questions. An economist answered them.
Date: July 28, 2026
Host: Waylon Wong (with Adrienne Ma)
Guest: Darrell Fairweather, Chief Economist at Redfin

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Episode Overview

This episode is a lively, listener-driven Q&A featuring Darrell Fairweather, Chief Economist at Redfin, answering real questions about the sluggish US housing market. Amid record-low existing home sales, high mortgage rates, and ongoing affordability challenges, audience members and hosts dig into the forces shaping the American housing landscape. Major themes include mortgage rate impacts, supply shortages, housing as an investment, and incentives affecting homeowner decisions.

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Key Discussion Points & Insights

1. The State of the US Housing Market

• Stagnation and "Mortgage Lock"
  • Home sales are near record lows, with both buyers and sellers reluctant to act.
  • “[Since mortgage] rates went up in 2022, both buyers and sellers backed off the market.” (Darrell Fairweather, 00:20)
  • Sellers are reluctant to give up the low mortgage rates they secured in recent years, while buyers are unable to afford the steep rates and high prices.
  • “Buyers can’t afford to buy at these high prices and high mortgage rates. And sellers don’t want to move because that would mean giving up their very affordable mortgages…” (Darrell Fairweather, 00:28)
• Slight Improvement, but Slow Progress
  • There has been some relaxation recently, but “it’s very, very slow going.” (Darrell Fairweather, 00:28)

2. Why Mortgage Rates are High

• Economic Growth & Inflation (02:57)
  • Mortgage rates are ultimately shaped by wider economic factors.
  • “When the economy is growing, that can put pressure on mortgage rates to go up. But also when there's inflation, that also increases mortgage rates.” (Darrell Fairweather, 02:57)
  • Current rates are high due to robust economic growth and elevated inflation, which the Federal Reserve wants to contain.

3. The Unusual Current Housing Market

• Sticky Prices and Low Inventory (03:49)
  • In past cycles, higher mortgage rates led to lower prices as sellers chased fewer buyers.
  • This time, “sellers are very stubborn. They have what economists call high reservation prices, which means they're not willing to cut their prices.” (Darrell Fairweather, 03:49)
  • Many sellers choose not to sell at all instead of accepting lower prices, leading to an inventory crunch.

4. The Supply Shortage and NIMBYism

• How Did We Get Here? (04:56)
  • The scarcity of homes boils down to “NIMBYism”—Not In My Backyard attitudes.
  • Homeowners block new, denser developments (apartments, condos), fearing changes to neighborhood aesthetics or impacts on property values.
  • “They don't feel the impact of the housing affordability crisis because they already own their home... and they tend to have more free time. They tend to be retirees who show up at local city council meetings and voice their concerns...” (Darrell Fairweather, 05:00)
  • Areas with laxer rules, like Austin and much of the Sunbelt, see more new construction and greater affordability.

5. Is Housing Really a Good Investment?

• Audience Question: Has housing always been a good investment, and will this remain true? (06:38)
  • Darrell notes two classic reasons housing is attractive:
    1. Housing as forced savings: “It's really hard for a lot of people to save every single month. And the way that they do save when they own a home, they just pay their mortgage and magically they build up equity.” (Darrell Fairweather, 06:52)
    2. Limited Land & Population Growth: “There is a fixed amount of land in this world... but we are making more people—or at least, for a long time we were.” (Darrell Fairweather, 07:37)
  • Future uncertainty:
    • Population growth is slowing, leading to possible changes in demand.
    • The coming wave of baby boomer homes entering the market could change investment calculations.
    • “I think the reasons why people buy homes are going to change in the future... it's not just going to be for a good investment. I think people are going to think more about the value of enjoying the home that they live in...” (Darrell Fairweather, 08:28)

6. Downsizing Dilemmas & Government Incentives

• Empty Nesters and the Move That Doesn't Happen (08:39)
  • “It's a misallocation of housing... Empty nester Baby boomers, and how this is a misallocation of housing.” (Darrell Fairweather, 09:10)
  • Retirees are financially incentivized to stay in large homes: low-rate mortgages and property tax breaks discourage downsizing.
  • Government’s potential role:
    • “We need to create housing that someone like you would really be excited to move into—denser housing where you know you can access all the amenities you need...where you would have friends who are near, who you can do activities with...” (Darrell Fairweather, 09:32)
    • Adjust incentive structures rather than blame individuals.

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Notable Quotes & Memorable Moments

• “Sellers are very stubborn. They have what economists call high reservation prices, which means they're not willing to cut their prices.”
  — Darrell Fairweather (03:49)
• “NIMBYism—Not In My Backyard—is why we have so few homes... for at least the last 10, maybe even 15 years, these people have successfully blocked housing from being developed in the places people most want to live...”
  — Darrell Fairweather (05:00)
• “It's really hard... to save every single month. And the way that they do save when they own a home, they just pay their mortgage and magically they build up equity.”
  — Darrell Fairweather (06:52)
• “In order to improve the situation, we need to create housing that someone like you would really be excited to move into... Otherwise, people are going to stay in their homes...and it's not actually going to be all that beneficial for them, but it's the most affordable option for them at this moment.”
  — Darrell Fairweather (09:32)

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Timestamps by Segment

| Timestamp | Segment | |-----------|---------| | 00:05 | Introduction & market summary (Waylon Wong, Darrell Fairweather) | | 02:39 | Why are mortgage rates rising? | | 03:49 | What makes this housing market unusual? | | 04:31 | The housing supply shortage and its origins (NIMBYism) | | 06:38 | Audience Q&A: Is housing still a good investment? | | 08:39 | Audience Q&A: Downsizing and government incentives | | 10:07 | Wrap-up and thanks |

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Conclusion

This episode delivers a concise yet thorough snapshot of America's housing conundrum, blending economic analysis with real-world listener perspectives. Darrell Fairweather's frank assessment and clear explanations offer actionable insights into mortgage rates, housing supply, investment logic, and why existing systems are hard to nudge. The conversation spotlights both structural market realities and the need for creative policymaking.

For those interested in more, the full Ask An Economist event will be published as a bonus Planet Money episode.

Transcript

[Adrienne Ma]

Npr.

[Waylon Wong]

This is the indicator from Planet Money. I'm Waylon Wong. Existing home sales in the US Are near record lows. Darrell Fairweather, chief economist for the real estate site Redfin, says interest rates are a big reason why ever since mortgage

[Darrell Fairweather]

rates went up in 2022, both buyers and sellers backed off the market.

[Waylon Wong]

What you get, Darrell says, is a stagnated market.

[Darrell Fairweather]

Buyers can't afford to buy at these high prices and high mortgage rates. And sellers don't want to move because that would mean giving up their very affordable mortgages they got during the pandemic. This year we've seen a bit of an improvement. I think that, you know, things are starting to relax a bit, but it's very, very slow going.

[Waylon Wong]

So it's no surprise that a lot of buyers and sellers are having a hard time right now. We see it in the data and last week we heard about it directly from you. The indicator held a virtual event for our NPR plus and other qualifying we called it Ask an Economist and it was all about trying to make sense of the stagnant housing market. Adrienne Ma, my fellow co host and I, and more importantly, our audience got to put our questions to Daryl. It was like our very own call in show. It was fun, lively and full of insights. So today on the show we're excited to be able to share with you an audio excerpt of our Ask An Economist event that's coming up after the break.

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[Waylon Wong]

the higher the mortgage rate, of course, the more expensive it is to borrow money. And this month the average rate on a 30 year fixed rate mortgage hit 6.58%, the highest level in nearly a year. I asked economist Darrell Fairweather of Redfin why rates are climbing.

[Darrell Fairweather]

It's really the economy. I mean, mortgage rates are based on everything that's happening in the economy. When the economy is growing, that can put pressure on mortgage rates to go up. But also when there's inflation, that also increases mortgage rates. And in this economy, we have a fast growing economy, we also have higher inflation than at least the Fed is comfortable with, and that is contributing to these higher mortgage rates. I could get into all the little reasons why the economy is the way it is right now, but those are the big overarching factors. Keeping rates high and homes, at least for borrowing. A home unaffordable.

[Waylon Wong]

Yeah. And you had alluded to this a little bit earlier when you talked about the impact of high mortgage rates on both buyers and sellers. And so you're kind of describing what we've covered on the show as kind of like a mortgage lock, in effect. Right. When you see how they affect buyers and sellers.

[Darrell Fairweather]

Yeah. This housing market is so different than anything we've seen historically. Normally when mortgage rates go up, buyers back off because they can't afford to borrow at high rates. And because there are fewer buyers, sellers have to drop their prices in order to get their homes sold. But in this market, sellers are very stubborn. They have what economists call high reservation prices, which means they're not willing to cut their prices. They would rather delist their homes. And many homeowners aren't even choosing to sell at all. They're just staying with their cheap mortgages because they couldn't afford to. To sell and buy again, it would cost them $1,000 more or even more a month just to get the same priced home at these higher rates.

[Audience Member (Calum)]

Well, I mean, part of the picture here is not just rates for borrowing, it's also the shortage of supply. Right. I mean, it seems like there are pretty varied estimates on how big the housing shortfall is. You know, it's anywhere from, you know, one and a half to several million homes. Can you talk about one or two of the big things that have resulted in this shortage?

[Darrell Fairweather]

The reason there are so few homes, not enough homes for everybody who wants a home.

[Podcast Promo Announcer]

It.

[Darrell Fairweather]

It mostly boils down to something called NIMBYism, which stands for not in my backyard. That's when homeowners who live in a local area block new housing development, especially dense housing like apartment buildings or condo towers that they feel don't fit with the esthetic of a suburban neighborhood. Or maybe they're concerned about extra housing bringing down the value their homes, or they're concerned about, you know, the price point bringing in people who might be lower income than the people who currently live there. There's lots of different reasons why people might be NIMBYs, but these homeowners, they don't feel the impacts of the housing affordability crisis because they already own their home, they already have fixed rate mortgages, and they actually tend to have, like, more free time. They tend to be retirees who show up at local city council meetings and voice their concerns about new housing getting developed. So for at least the last 10, maybe even 15 years, these people have successfully blocked housing from being developed in the places people most want to live with the best job opportunities. And that's how we got into this mess of home prices being as high as they are. But in places in the Sunbelt, Austin, for example, Arizona, Florida, the laws are, they promote more housing, they allow for more housing, they don't give as much local control. And that's where we're actually seeing prices come down and affordability improve. And we saw a lot of housing development during the pandemic when demand was very hot. So you can see the differences between how prices play out in a place that allows for new construction versus places that don't.

[Waylon Wong]

Okay, so after AJ and I got to ask Darrell our questions, we then opened things up to our virtual audience.

[Adrienne Ma]

My question is housing has historically been viewed as a good investment. Was this perception true, and do we expect that answer will remain the case, or was it the product of historical conditions that might now be changing?

[Audience Member (Calum)]

Calum, thanks for your question. What do you think, Darrell?

[Darrell Fairweather]

There's a couple reasons to think that housing is, is always going to be a good investment. One reason is that you need a place to live. If you're renting, then you're paying your landlord. If you own, then you're building up equity. Now, I think that's a bit of an oversimplification because you can pay your landlord and set some money aside and put it into a 401k or your stock market account and still build wealth the same way that a homeowner would. But for behavioral reasons, it's really hard for a lot of people to save every single month. And the way that they do save when they own a home, they just pay their mortgage and magically they build up equity. Although it's not magic, they're, they're paying for that. But I think for a lot of people, homeownership is just a really Easy way for them to build wealth. And it's a very accessible type of investment because they need a place to live anyway. The other reason why real estate is viewed as a good investment is because of the land. There is a fixed amount of land in this world and they're not making more of it, but we are making more people. Or at least for a long time we were making more people. There's some debate about population growth nowadays, but for that reason alone, people viewed homeownership as a good investment because there would always be more demand for it in the future, assuming that the area they're buying, the home, is going to grow in population. And I think that that has been true. Moving forward, I think there are some other things to consider, like population in the United States, is that going to continue to grow? What's going to happen to baby boomers homes when they pass on and how will that impact the investment value? I think that the reasons why people buy homes are going to change in the future and it's not just going to be for a good investment. I think people are going to think about more just the value of enjoying the home that they live in and having a home that's uniquely theirs.

[Waylon Wong]

Darrell took a lot more questions from our audience, including this one from Colin, a self described near empty nester homeowner. He says it makes sense for him to downsize after his kids move out, but financial factors like his low rate mortgage and property tax exemption are keeping him in place.

[Adrienne Ma]

So I'm wondering what, if any, role the government should have in addressing those factors for people like me that are gumming up the housing market because we have strong financial incentives to not move right now.

[Darrell Fairweather]

Yeah, I hear stories like that all the time. We've done reporting about how baby boomers own more three bedroom plus homes than millennials with families like Empty Nest or Baby boomers, and how this is a misallocation of housing. I think people love to kind of pile on the baby boomers and tell them that it's their fault, but they're just responding to the incentives like you laid out. I think in order to improve the situation, we need to create housing that someone like you would really be excited to move into denser housing where you know you can access all the amenities you need. Maybe as you age you wouldn't be as reliant on a car where you would have friends who are near, who you can do activities with, because otherwise people are going to stay in their homes in these single family neighborhoods, isolated, and it's not actually going to be all that beneficial for them, but it's the most affordable option for them at this moment. So yeah, we really just need to look at the incentives.

[Waylon Wong]

Thanks again to Darryl Fairweather of Redfin. She is also the author of the book Hate the Economic Cheat Codes for Life, Love and Work. To hear the entire event, make sure you're signed up for npr. We'll be publishing it as a bonus episode in the Planet Money feed next week. This episode was produced by Viet Le, it was fact checked by Vito Emanuel and engineered by Robert Rodriguez. Kicking Cannon edits the show, and the Indicator is a production of npr.

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[Darrell Fairweather]

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