Everything You Believe About the Housing Market Is Wrong

Summary

Housing analyst Ivy Zelman argues the U.S. housing market is in balance, not in a massive shortage, with a stark divide between overbuilt Sun Belt markets and supply-constrained Midwest/coastal areas. Affordability is the worst since the early 1980s, making renting far cheaper than buying and shifting household formation toward multifamily. She expects apartment rent growth to recover by 2027 and notes that the single-family rental sector is picking back up after a regulatory pause.

• National home prices flattening; Sun Belt markets down up to 20% from peaks, Midwest up mid-single digits.
• Entry-level affordability at worst since early 1980s, with monthly costs approaching 60% of income.
• Ivy Zelman sees no nationwide housing shortage; the market is balanced at about 1.4 million starts.
• Demographic headwinds: declining births, aging population, and slowing household formation.
• Renting saves ~$800-$900 per month versus buying, boosting multifamily demand.
• Multifamily currently oversupplied but poised for rent growth improvement by 2027.
• Institutional interest in single-family build-for-rent returning after legislative uncertainty eased.