The current state of the housing market has left many potential homeowners, especially first-time buyers, feeling uncertain about their chances of securing a home. Drew and Jonathan Scott, the well-known hosts of HGTV’s “The Property Brothers,” are among those expressing concern over the ongoing affordability crisis, with a particular emphasis on the severe shortage of housing inventory.
According to Jonathan Scott, the primary challenge facing the market today is the lack of available homes. He pointed out that the United States is short about 4.5 million homes to reach a “healthy market” level. “When you don’t have a healthy inventory of homes, that’s probably the biggest driver [of unaffordability],” Jonathan told Brian Sozzi on Yahoo Finance’s Opening Bid podcast. “Competition is what drives prices up and down, and right now, there just aren’t enough homes to go around.”
Despite recent cuts to short-term interest rates by the Federal Reserve, mortgage rates have continued to rise. Since September, 15-year mortgage rates have increased from a low of 5.15% to 6.02%, according to Freddie Mac, and 30-year mortgage rates have similarly climbed, making it even more difficult for potential buyers to afford a home.
Drew and Jonathan aren’t just concerned about the current state of the market—they’re also worried about the future. “My fear is that in 20 years, our kids won’t be able to afford to buy a house,” Jonathan said. “The market is going to be so expensive, no one will be able to get in. We need to start tackling this problem now.”
While the brothers acknowledged that lower interest rates would be beneficial for the market, Jonathan predicted that lenders may soon offer new mortgage products designed to make homeownership more accessible, especially for younger buyers. However, he warned that these products might come with longer repayment terms, leading to mortgages that take much longer to pay off. “Lenders want to lend you money, so they’re going to come out with products that make it a little more accessible,” he said. “But the downside is that it could extend the amortization period, meaning it will take longer to pay off that investment.”
In addition to these concerns, the Scott brothers are also taking action through their Healthy Home Innovation Fund, which they launched in partnership with Groundbreak Ventures. This initiative supports innovations and products aimed at addressing the housing crisis by reducing costs for homeowners, renters, and builders, offering potential solutions to some of the ongoing challenges in the market.
While addressing inventory shortages may be a longer-term challenge, the brothers encouraged homebuyers to think creatively. “I think people need to be more creative if they want to own a home,” Drew said. “It could mean partnering with a friend or family member, or exploring alternative housing options like building an accessory dwelling unit (ADU) or another auxiliary unit.”
The Scott brothers’ insights underscore the urgent need for solutions to address the affordability and inventory issues plaguing the housing market, and their work with the Healthy Home Innovation Fund reflects their commitment to finding new ways to make homeownership more attainable for everyone.
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