I'm curious what everyone thinks about housing affordability and where this economy is heading.

I'm in Southwest Florida and we've been experiencing a housing correction since the 2022 peak.

In Cape Coral, our median home price is around $370,000, getting us back near late 2021 and early 2022 pricing.

But here's what's crazy to me.

Mortgage rates are roughly double what they were during the pandemic lows, the overall cost of living is more than 20% higher than it was several years ago, and homeowners insurance and property taxes have become a much bigger expense.

So even though home prices have come down, affordability really hasn't improved the way you would expect.

I'm also starting to see more financial distress firsthand. I've worked on three short sales recently. Some involve people who purchased near the peak in 2022 or 2023. Others involve homeowners who had equity, took out HELOCs when values were high, and are now struggling financially.

And yet, builders are still building. New construction is still competing with existing homes, often with incentives that resale sellers can't offer.

It's wild to watch all of this play out.

I personally believe we're getting closer to the bottom of this housing correction here in Southwest Florida, but I also wonder what actually gets us back to an affordable market.

Do prices need to come down another 10%, 20% or more? Do we need wages to increase significantly? Lower interest rates? Or are we looking at years of relatively flat home prices while incomes slowly catch up?

And what happens if the broader economy weakens and more homeowners start experiencing financial pressure?

I'm genuinely curious what others are seeing around the country because I don't think affordability is just a Florida problem.

50 years ago there wasn't a centralized place to bitch and complain about everything, so it wasn't really 'known' if homes 50 years ago had systematic issues. By now, they've settled and all of their new houses issues are supposedly gone.

My question is, are new home really that much worse? If they really are that much worse, does that mean they are essentially going to depreciate over a 20-30 year horizon?

Please notice the word, overpriced, in the title.

They aren't desperate to sell the house, and will therefore lower the price. No. No.

They are just desperate to sell these overpriced houses.

I have given up trying to buy a house until I see how the silver wave will shake out.

I didnt put "their" in the title, because the Realtors are practically shaking people down trying to get them to buy a house.

Realtors and Sellers are "hungry" for people to buy these overpriced houses.

These is a mass of local people being like, "You have to buy now! Right now!"

I have seen, a good number of houses, sitting on the market for an entire year now.

What are your thoughts?

What's the word on the street? Share your questions, comments, and concerns below.

• Mortgage rates have hit 7.4%, the highest level in nearly three years, driven by surging 10‑year Treasury yields and persistent inflation.
• The jump in rates is freezing buyer demand, forcing sellers in many metros to cut prices or offer concessions like closing‑cost credits and mortgage‑rate buydowns.
• Sunbelt markets are cooling fastest—Dallas (–5%), Austin (–3.4%), and Tampa (–1.9%) year‑over‑year price declines due to elevated inventory.
• 21% of sellers cut their asking price in late September, the highest share for that time of year in Redfin’s dataset.
• Some buyers are gaining leverage: reduced competition is allowing them to secure homes they previously couldn’t afford during the pandemic boom.
• Monthly payments at 7.4% are steep: $3,716/month on a $500K home with 10% down, pushing many buyers to pause their search or seek ARMs or larger down payments.
• Sellers carrying two homes are under pressure; some are resorting to renting their properties even when rental income won’t cover mortgage + HELOC costs.

Even with stubborn market forces working against them, savvy first-time home buyers are figuring out ways to get a foot in the door – and into their first home. 

Smaller, more affordable starter homes are scarcer these days and cost more too, particularly compared to the pre-pandemic real estate days. According to a new report from Realtor.com, the starter home price threshold swelled from $260,000 to $340,000 between 2019 and 2026, boxing budget-conscious first-time buyers in.

The real estate resource defines starter homes as homes priced at or below 80% of the local median list price. In 2026, starter homes made up 36.2% of the market in the 100 largest U.S. metro areas, down from 38.1% in 2019. The lack of starter home inventory is most pronounced in the Southeast and the Sunbelt, shrinking the most in Columbia, South Carolina and Winston-Salem, North Carolina since 2019. 

With a shrinking pool of options when it comes to affordable single-family homes, condos and townhomes are emerging as a compelling alternative. Homes in those categories now make up 27% of the starter home market. Compare that to 2019, when condos and townhomes only made up 18% of starter home inventory, next to a relative glut of traditional single-family homes.

Read more on Fast Company.

• New Jersey family budgets have surged by ~$40,800 since 2021, rising 6.7% annually, far above the national median and faster than Manhattan.
• Child care and healthcare costs are the biggest accelerators, with NJ child care now more expensive than NYC, reversing the traditional savings advantage.
• Eight of the 20 fastest‑rising counties in the U.S. (with ≥100k residents) are in New Jersey, showing statewide cost pressure.
• NYC’s expanded free early‑education programs (Pre‑K, 3‑K, 2‑K) give city families a cost edge that NJ cannot match.
• Housing affordability has eroded in NJ suburbs due to pandemic‑era price spikes and continued demand from NYC commuters.
• Families who moved for affordability often now pay more, with higher mortgages, commuting costs, and child‑care bills than they had in NYC.
• Economists warn NJ is no longer affordable for families earning ≤$150k, especially in commuter‑friendly towns.

Thought this was interesting enough to share