Dave:
The housing market is not going back to normal anytime soon. And today I’m going to prove it to you with real math and real data. Everyone wants to know when the housing market gets better, when it becomes easier to buy a home. I hear this question from buyers. I hear it from sellers. I go on the news frequently and I hear this question all the time. My friends who are renting ask me this question all the time. Everyone wants to know. And there actually is a sort of simple answer to this question. The answer is the housing market gets better when housing affordability improves. That’s the single thing that is causing the sluggish market that we’re in. And once affordability gets better, so will the housing market. But how does it actually get better? When most people hear the word affordability, they think mortgage rates, and that is an important piece.
But how far do mortgage rates have to fall to restore affordability? And what about the other pieces of affordability? Because it’s not just mortgage rates. It also comes down to home prices and wage growth. Those are the three components of affordability. And you have to look at all three if you truly want to understand why affordability is so bad, where it’s going, and what to do about it. So today on the show, we’re going to do the math and we’re going to figure this out. We’re going to figure out how and when we’ll actually get back to a normal housing market with normal affordability. And I’ll give you a spoiler. The answers here are uncomfortable, but knowing them will help you. They’ll help you set realistic expectations for your buying, for your selling, if you’re investing for years to come. This is on the market.
Let’s get to it.
Hey everyone. Welcome to On the Market. I’m Dave Meyer, investor, housing analyst and chief investment officer at BiggerPockets. Today we’re talking about one of my favorite topics, which is housing affordability. I said back in 2022 and every year and every week basically since that affordability was going to dictate what’s happens in the housing market, which markets, regional markets are going to grow, which ones are going to contract. And so far that has been true. The good news for a while, for a couple years was that affordability was actually improving. After 2022, we saw this huge spike in interest rates where affordability deteriorated, but we were sort of slowly going in the right direction. Wage growth were going up, real home prices were sort of flat and mortgage rates were trending down and that was improving affordability. But now the opposite is happening. Rates just went above 7.5% as of this recording.
And right now there’s not really a clear line of sight on things getting better. And so the question becomes, and the question everyone asks and I try to answer as much as possible is when is this going to get better? What is it going to take for the housing market to get back to normal? And I know everyone on social media has a take about this, but as you all know, I’m an analyst and I decided to solve this question with math. So rather than just feeling this out on vibes or some random person’s opinion, I am putting real numbers to what it is going to take to get back to a housing market that looks something like normal. And for the purposes of this episode, I’m going to use two different definitions of normal. So I calculated the long-term affordability average. So this is going back decades, what is a normal housing market affordability?
And then I’m also going to use 2019 as a different yardstick because that was kind of the last quote unquote normal market we had. If you were investing then or just paying attention to the housing market in 2019, it felt pretty normal. It wasn’t growing like crazy. Rents were going up a little bit. Affordability was a little bit constrained, but it was fine. And so those are the two benchmarks we’re going to look at and we’re going to figure out what is it going to take from where we are here towards the end of 2026 to get back to something that feels normal. Let’s jump into it. First up, just want to address what affordability actually means because some people hear affordability, they think price, they think mortgage rates. It’s not. It’s actually three different things. It’s a combination of home prices, so how much you’re paying, two, mortgage rates, what it costs to borrow.
And I guess if you’re buying cash, that part is not in there, but most people are using leverage and are using a loan, so we’re going to talk about mortgage rates. And the third is real wages, how much people are actually earning. So those are the three elements of affordability and there are different ways to measure this. People do it differently. NAR has their own version. New home builders have their own version. Wells Fargo has their own version. They’re all fine. I like NARs because it basically uses something called the payment to income ratio. This is basically comparing your monthly mortgage payment to your income. Makes sense, right? Super easy, right? What percentage of your take home pay is going to your mortgage payment? That to me is a very good way to measure affordability. So that’s what we’re going to use for our analysis today.
So knowing that, let’s talk about the benchmarks and what “normal affordability” is in the housing market. And I told you before, I’m going to do two different benchmarks. The first one is the long-term average. And so basically what we’re looking at for a long-term average payment to income ratio is 18.5%. In other words, on average, going back to 1989, so almost 40 years, you could say that the average gross income before taxes, gross income, about 18.5% of it goes towards your mortgage. And that average includes great times in the economy. It also includes terrible times in the economy, and it averaged out at 18.5%. Now, I do think it’s important to mention that this only goes back to 1989, and so it does omit one of the worst periods. Actually, outside of right now, the worst period of housing affordability that we’ve had in this country in the early 1980s.
Prices weren’t high, but mortgage rates were in the double digits. Some people were paying 15, even up to 18% mortgage rates. And at that time, we don’t have a data series for that, but you can actually calculate points in time. I’m getting nerdy about this, sorry, but 36% of your income back in the early 1980s. So I just want to call out that if you went back further, like another 10 years, then you’d probably have something closer to 20 or 21%, but I don’t have consistent data during that time, so I’m going to use this 1989 starting point. That said, I still think this is a good benchmark. If you look at the last 40 years, that’s a long time. We’re in a new economy. The last 40 or so years, 18.5%. Then let’s talk about benchmark number two, which is what I call the last normal market, 2019.
So again, I’m just choosing this year because it was the last year before COVID. You were guests in the low interest rate environment, but interest rates were starting to crawl back up. It was like a normal, healthy, functioning market. And back then in 2019, the payment to income ratio was 15.6, let’s call it 15 and a half. So long-term average, 18 and a half. Then we had 15 and a half in 2019, so better than the long-term average. Those are our benchmarks, 18.5 and 15 and a half. Now let’s talk about where we are today. Let’s compare to these benchmarks. Well, the last time NAR broke this down, this is like the data series I based this off of, our percentage is 24.6%. Again, we’ll call it 24.5%. So now we can see significantly more of everyone’s take home pay is going to their mortgage payments.
This is 6% of people’s income more than the long-term average going to their mortgage, and it is 10% higher than in 2019. So if you’re wondering why it feels so bad right now, it’s because we had abnormally good affordability in the years going up to COVID and now we have abnormally bad affordability. And I should mention that this 24.6 number, that came from June before mortgage rates went up. I just think they haven’t published this yet, but I just extrapolated how they do this with today’s interest rates in the middle of October. And what you can see is that it goes up to 27%. That’s serious stuff, right? That is significantly worse affordability than we were. You want to know why the housing market is sluggish and slow and difficult? This is it, right? It all comes down to affordability. The whole story here is that since 2019, when we had abnormally good affordability, home prices are up 63% on average.
Meanwhile, family income is up only 37% on average. And with mortgage rates going up significantly, not just over where they were in COVID, but were higher than they were in 2019 and much of the 2010s and really much of this century so far, monthly payments are up 116% since 2019. They have more than doubled. Meanwhile, income has only grown by a third. So you want to know why the housing market is slow, you got it right there. But you all probably know this, right? You know that the housing market is slow and affordability is bad, but today why we’re here is to talk about how it gets better. And so I did three different analyses here and I’m going to go through each of them, but basically what I’m going to do in this next segment is talk about what has to happen to each element of affordability to get better.
So we’re going to hold two of the levers of affordability constant and we’re going to change the other one. So just for an example, we’re going to say if mortgage rates stay the same and prices stay the same, how much do wages have to go up for affordability to improve? So we’re going to go through each of these scenarios and then we’ll talk about how some combination of these things can happen. Spoiler, that’s probably what’s going to happen, but I think going through each of these will help you understand exactly where we are in the housing market. We got to take a quick break before we do that though. Stick with us. We’ll be right back.
Welcome back to On the Market. I’m Dave Meyer. Today we’re going through our affordability analysis and I’m going to walk through the ways that affordability can get better. Remember, we have three levers. There are three legs to the affordability stool. They are wages, mortgage rates, and they are prices. And we’re going to look at each one individually. We’re going to start with wages. In my opinion, this would be the best way for affordability to get improved, right? Mortgage rates can stay the same. Prices can stay the same. I don’t care. If everyone’s wages just went up a lot, that sounds great, right? That would be better. Is that realistic? Could it happen? Well, in order to get to our long-term affordability of 18.5% of your income going to your mortgage rate, we would need wages to rise 33%. Real wages, that’s inflation adjusted wages, would need to go up 33%.
To get back to 2019 affordability, they would need to go up 57%. Do you think that’s realistic? Well, take this stat. Why don’t you just ponder this one for a minute? Real median wage growth did grow 56%, which we need 57. It grew 56%, but it took from 1967 to 2025, 58 years, right? So if you calculate that, that means that on average real wage growth, that’s inflation adjusted wage growth, so you’re actually earning more even after inflation is accounting for, amounts to just 0.8% a year since 1968. I’ve done other episodes on this in the past. I’ll do more on the future because it’s a huge problem in our economy that real wages really don’t grow, but I think you can see that wage growth is really not the solution here. If you were just calculating this, how do we get back to 2019 affordability?
We would need 59 years of wage growth at existing rates. And right now I should mention that real wage growth is negative. It turned negative this year because inflation is higher than the average pay raise right now, and so it’s going negative. But even using the historical average, 59 years to get back to 2019 affordability to get back to our long-term affordability, it would only take a mere 40 years. So I think it’s safe to say that wages aren’t going to get us out of this problem. Now, this isn’t part of the analysis, but I will just say the one good thing is that if you look at wages, they are growing faster right now than home price appreciation. So that has helped affordability a little bit, but just look at the big picture here. You can all see that unless something really big changes in the economy, wages are not going to solve this problem for us in the housing market.
And like I said, wage growth negative right now. If you look at some of the trends in AI, it’s hard to imagine wage growth picking up in an environment where AI is replacing a lot of high paying jobs. I just don’t see it. So can wage growth contribute to better affordability? Yes. But right now it’s going in the wrong direction. It’s actually detracting from affordability. And even if we get back to the long-term 60-year average of wage growth, it’s going to take two generations for the housing market to get back to normal. So I think it’s fair to say don’t count on wage growth. Let’s move on though to lever number two, which is mortgage rates, right? This is the one that everyone keeps talking about because it is the most volatile, especially in the last couple of years. It’s not always volatile, but in the last couple of years, we’ve seen mortgage rates go up, they go down, they go up, they go down.
And so people are thinking with all this volatility, rates are going to go down and that’s going to improve the housing market, right? Well, that is true. That is a very reasonable piece of logic there, right? You co say, yeah, mortgage rates go down, affordability to get back. But how low do mortgage rates actually need to be? To get back to 2019 levels of affordability, the last normal market that we have that everyone wants to get back to, you know what mortgage rates are going to need to be? 2.7%. 2.7%, pretty low. I’ve heard a few people, some mythical creatures out there who have mortgage rates at 2.7%. Pretty rare though, even in 2021, the best mortgage market we’ve ever had and we’ll ever see in our lifetimes, in my opinion, I do not think we’ll ever see that again. The average rate was 3%.
So are we going to get back to 2019 affordability with mortgage rates? I don’t think so. I don’t think we’re getting to 2.7%. I think we’d all be super stoked if we got to 5.7% in the next couple of years. So we’re not getting to 2.7%, not to 2019 affordability. Even to get to the long-term average of long-term affordability, mortgage rates would need to drop to 4%. Might happen again in our lifetimes, but maybe not. Before the financial crisis, 4% mortgage was absolutely unheard of and maybe they’ll come back. That’s possible. I don’t think 2.7 will ever come back, but 4% is possible, but it would take a lot of unusual things, bad things in the economy to happen for us to hit 4%. So again, mortgage rates probably not going to happen. And I’ve talked about this at length, so I’m not going to go into super detail on this.
You’ve probably heard me talk about mortgage rates all the time. I’m not even going to talk about 2.7% because it’s just not going to happen. But let’s just talk about 4% because I see people on social media being like, rates are going to be 4% next year. I’ve been spending four years telling people that’s not going to happen. And I’m just going to explain why it’s not, because it doesn’t matter what the Fed does. They can cut interest rates back down to zero again and we won’t get 4% mortgage rates. I’m just telling you that right now, not while inflation is high. We need to win the battle on inflation. That is how mortgage rates come down and it’s just heading in the wrong direction. It’s not like going out of control. I know there’s a lot of talk of inflation. It’s not like it was in 2021 when there was 9% inflation.
It’s not like that, but 3.4% inflation matters because mortgage rates are based off of this number, right? Again, I’m not going to go into all the mechanics of this, but inflation really dictates what happens in the bond market and what happens in the bond market impacts mortgage rates. And when inflation is up, it pushes all of these things up. And so unless we start to see inflation come down to below, even below the Fed’s target of 2%, we would probably need to see inflation at 1% maybe to get 4% mortgage rate. So that’s possible. It is definitely possible, but it doesn’t look likely. We’ve spent five years above that target, well above that target. And if you’re thinking the difference between 1% inflation and 3% inflation doesn’t matter, that’s incorrect. It does matter. It’s incredibly important for the bond market. And so it’s not going to happen.
Just look at the bond market, just Google 10-year US treasuries. I know no one’s going to do this, but you could. You could just see it’s going in the complete opposite direction. So if you’re searching for hope in the mortgage market, could they come down next year? Yeah, I hope so. I hope that there’s a resolution to the conflict in Iran and maybe mortgage rates go back to 6.5%. Maybe they get to 6%. That’s my most optimistic case for 2027 is like 6%. That would be great, but we’re not getting a 4% anytime soon. I’m sorry, that’s going to be at least several years and maybe never. We might never get to that point. We have all gotten used to mortgage rates that are much lower than our normal. We’ve had zero interest rate policies for a lot of the last 15 years, 17 years.
And I think the Fed’s learned its lesson with the inflation that we’re having to not do that unless there’s an extreme emergency. And so another reason I wouldn’t count on mortgage rates bringing back affordability anytime soon. Will mortgage rates trend down over the next 10 years? I don’t know. I hope so, but I wouldn’t necessarily count on big moves down. Could they get into the 5%s? Yeah, I hope so. I think that would be a great place for us to land. Personally, if we could see mortgage rates at 5%, 5.5%, I think that would be good, but it’s not getting us back to old affordability. So again, don’t count on mortgage rates. That brings us to our third lever. We’ve talked about wages, we’ve talked about mortgage rates, both of which I think are going to be a challenge to help us in the next year, two years at least.
We need to win the battle on inflation. I’m not counting on wage growth. That brings us though to home prices. How do we get back to average affordability with home prices? Well, in order to get back to 2019 levels, we would need home prices to crash, like truly crash 36%. That’s huge. To get back to that long-term average, we would need them to go down 25%. So just for some context, to get back to the long-term, back to 1989 average, we need the average home price to go down to about $335,000. Right now, it’s 446. That is a huge, huge crash. To get back to 2019 levels, we would need prices to go down to 284. That is an even bigger crash. And just for context on this, the biggest price crash in modern history, as far back as we have reliable data for, was the great financial crisis in 2007, 2008.
And prices went down during that time, about 20%, 22%, depending on who you ask, but neither this big. And I just want to stress that that was a real estate created crisis, and there was bad debt, and there was all sorts of situations that contributed to that, that do not exist right now. A 25 to 35% national crash is unlikely, in my opinion. I’ve said it many times on the show for four straight years while everyone’s calling for a crash. I’ve said that this is unlikely. If you look at what’s going on with the lock-in effect, that is going to provide a lot of padding for the housing market. About 80% of mortgages are below 6%, 50% are below 4%, and 20% are below 3%. That’s unbelievable, right? It just causes people not to sell. They don’t have to, and they won’t because moving will be more expensive.
That’s the difference between 2008 and today. People did not have equity in their homes back then. They had adjustable rate mortgages that was making it progressively more expensive for them to stay in their homes. They were underwater on their mortgages and they were forced to sell. Right now, as mortgage rates go up, what happens? The lock-in effect is only getting stronger, right? There’s not going to be as many homes going on the market. That is my number one prediction. I did this on social media the other day.People say, “What’s going to happen?” Fewer people are going to sell homes right now. That doesn’t mean inventory is not going to go up. They are going to go up because the ones that go on the market are going to sit longer, but fewer new listings, that is going to happen. The lock-in effect is only getting stronger.
The second thing is inventory is not growing that much, right? In order for a crash to happen, we need to see a flood of inventory. It’s not happening. We are seeing, yes, increased inventory, but from a year ago, it’s up five or 6%. It would need to go up a lot more than that. For a crash to go 25, 35% crash, we’d probably need to see at least 50% inventory growth, if not more, so that’s not happening. And the third reason a crash is unlikely is there’s just not a lot of distress. I know there’s all these media posts about foreclosures going up, and that’s true because they’re going up off this artificial low during COVID. But if you look at actual numbers, if you truly care to take the time and study this, which I do, you look at the distress in the housing market and it’s really not bad.
Delinquency rates are lower than they were in 2019, and they’re actually going down. They’ve gone down the last several months. So yes, foreclosures are going up because it’s people who fell behind during COVID and they’re working their way through the system. This takes years, and so now some of them are getting foreclosed on. But if you look at early level distress, people are entering the foreclosure funnel now, it’s gone down. And so there is very little distress. Now, of course, regional corrections are real and possible. You look at parts in the Sunbelt, Austin, you can argue that that’s a crash. They’re down more than 10% in nominal terms in Florida, Texas, places like that. Markets I invest in, in Denver, it’s not down that much yet, but I think they will go down more than 10% in Denver. In Seattle where I live, I think there’s real danger there.
There’s regional places. In the Midwest, prices are still going up, right? So on a national level, a crash remains unlikely. And so this is why I started the show saying that the realities here are tough to swallow. If you look at these realities, no one lever can fix it all by itself. Wages aren’t going to grow out of it, mortgage rates aren’t going to come down enough, and prices are not going to come down enough. So the only realistic path here is that it has to be some combination of these things. Again, this is something I’ve been saying for a long time, that this is the most likely path for the housing market, but today I’ve actually brought you some numbers on how long it could actually take. And we’re going to get into that, but we got to take one more quick break. We’ll be right back.
Welcome back to On the Market. Today, we’re talking about housing affordability and the paths that it could take to get back to normal. And as we talked about before the break, no one lever or pillar of affordability is going to fix this problem. Wages aren’t really growing, so that’s not going to help. Mortgage rates would have to fall to really low levels to get back to 2019 affordability, and we’d have to see a price crash bigger than the financial crisis to get us back to normal affordability. So you can’t just look at one of these things altogether. You have to look at them in combination. And I did. I actually did the math on all of this stuff to look at some of the most likely outcomes. So first up, I’m going to call this the base case. This is not my opinion. So just be clear, this is what I would say is what the average real estate person thinks is going to happen.
This is the base case. They would say rates are going to come down to about 6%, prices are going to stay flat, and income’s going to outpace inflation a little bit. It’s a totally reasonable scenario. This is not pie in the sky stuff saying that rates are going to go to 6%, home prices are going to stay flat, income is going to go three and a half percent per year. If all those things happen, how long do you think it would take for the housing market to get back to normal? It’s not one year. It’s not three years. It’s not five years. It would take seven years for that to happen. So that’s what people are thinking, right? This could be a long time. We could talk about some other scenarios. I’m just going to name a couple I ran because I was curious about them.
So I came up with a scenario where rates stay a little bit higher, right? So if rates stay at 6.6%, home prices stay flat, income is at 3.5%, just that little difference, that little difference from six to 6.6% in rates, that would take our years to go to normality from seven years to 20 years. 20 years it would take for that to happen. That’s crazy. Actually, you want to know something that’s really crazy? If you want to get back to 2019 levels of affordability, even if rates go down to 6% and home prices don’t even grow, and you just assume good wage growth, it’s going to take 12 years. That is not good. This is not a scenario that I think is realistic because the housing market is going to get strained before that happens. And so when I look at these numbers and I say all these assumptions people have out there that rates are going to come down, that prices are going to stay somewhat flat, that wages are going to keep growing, I don’t think the housing market can stay in this stall, the great stall that we’re in for another seven years.
To me, the most likely scenario is rates come down 6%. Wage growth I think is going to be muted, right? AI, all of these things, it’s negative right now, but hopefully inflation comes down and real wage growth goes back up. Let’s just call it 2% real wage growth. That’s optimistic. But even if it is, prices, if they come down 2% per year, so a correction, a prolonged correction, it’s still going to take about five years for the housing market to get back to normal levels of affordability. I know that’s a sobering analysis for real estate investors and for people who are in this industry, but I want to be honest with you. The math is tough here. It is really hard to figure out and to model out a way for the housing market to get back to normal. Like I said, even if rates go down, a full one and a half percentage points, even if wage growth goes from negative to positive 2%, and even if home price is just correct, 2% per year for the next couple years, it’s still going to take five and a half years for the housing market to reach its long-term affordability.
Now, the thing here I want to call out here is that a lot of influencers and people who call for crashes say that we need to get back to historic affordability. And I would hope for that because I think that’s good for our society, but I don’t think that’s true. I just straight up think that’s wrong actually. I think we are in an era where housing is going to take up a higher percentage of people’s income than it has in the past. There’s a lot of reasons for this. We can go into it another time, but I just believe that trying to get back to that 18.5% rate is unrealistic. Could we get to 20%? That would be good. 22%, not as good, but I think the market could start functioning again if we’re in 20%. So could that happen? Yeah, I think that would take three to four years.
But again, that requires prices coming down two or 3%. That requires mortgage rates coming down from seven and a half back down to six. That requires wage growth to happen again. And I think if the wage growth doesn’t come, if the mortgage rates don’t come, prices are going to come down more. And again, I am not saying a crash, right? We saw double digit declines in one year in the great financial crisis. But when I look at this math, after doing this analysis and looking at this stuff for years, I don’t see how prices don’t go down in the next couple of years. And I’ve been saying this for years. It’s not different from what I’ve been saying. I predicted this year, we do predictions on the show that prices are going to go down and I’m sticking with it. Again, if you look at nominal home prices, they’re up modestly, but real home prices, like inflation adjustment home prices have been down or flat for four straight years, and I think that’s just what’s going to happen.
And I know that might sound like it stinks and people don’t like that. I think it’s the worst for people who work in this industry an agent or a loan officer who rely on transaction volume, that’s the tough pill to swallow because transaction volume will not go up until affordability improves. I feel pretty strongly about that, that they are very closely correlated. And so that’s tough. As an investor though, this is an opportunity to buy. It just is, but you need to take into account that this could be a prolonged period where appreciation is low. And it goes back to the things we say all the time on the show, but I always say you need to buy below current market comps. You can’t just say, “Okay, this house is worth 200 grand, I’m going to buy 200 grand.” If you’re holding onto it for a long time, you got to buy that for 170.
You need a 15, 20% discount off current market comps to feel good about it. It depends on your market, of course. If you’re in a super hot market, that probably doesn’t apply. But if I think about buying in Denver, I think it would have to be 20% off current market comps and cash flowing. That’s the only way I would buy that because when I look at this, we’re not going to get appreciation for a while. So you have to make it yourself. There’s only two ways to make appreciation. One is on the buy, you buy below market comps, or you do value add. Both of those still work. So that is the positive news for real estate investors or homeowners who want to do this as well. It works for homeowners as well. But man, do not listen to those people on social media who say, “We’re a year or two away from the housing market recovering.” It’s really not.
The only scenario I can see where the housing market becomes affordable again in the short term is a big recession, a big one, a massive recession where it causes inflation to drop and money pours into bonds, so mortgage rates come down. But mortgage rates would probably sit in the four or 5%. And we’re going to have the lock-in effect. So we’re not going to see this huge flood of inventory. And in that case, maybe home prices go down five or six or 7% a year instead of 2% a year. And then maybe in two to three years we are back at affordability levels. But that’s not a good scenario. No one wants that scenario. So there’s no good way out of this. Either we wait or there’s a really bad economic outcome. I don’t see a way we grow out of this. I know people say AI is deflationary.
That really hasn’t proven to be true. I don’t really buy that line of thinking. I don’t think we’ve ever really seen service deflation in the United States as far back as I’ve seen data for. And so yeah, it’s optimistic, maybe it’ll happen. I hope it happens. That would be great. But service deflation may bring down the inflation number, but it also might bring down wage growth. So all these things are just so optimistic. I don’t like being pessimistic. I don’t think I normally am, but in the last couple of years, I just try to let the math do the talking. And the math is kind of clear to me here. It is very unlikely we’re going to get affordability back in the next couple of years, and I really think it makes sense for you to plan accordingly. I am not one of these people out there who’s going to go tell you to buy real estate at all costs.
I still believe real estate is the best path to financial freedom. I still think you can and should buy right now, but it’s not because there’s going to be appreciation in the next few years. There will be appreciation again, that will happen, but it’s going to take some time. And so you need to position yourself. You need to buy so low that you’re not losing money in the next couple of years. And then when appreciation does pick up, you got in at such a good basis that your returns are going to be huge when it picks back up. That’s what happened in the financial crisis. People who did well bought super low back then. A lot of times they bought in 2008, 2009, 2010 before the market recovered. The market didn’t bottom until 2013. They bought then at a low enough price that when the market did recover and those returns came, they were able to benefit from that.
And it’s the same playbook here. It’s very different from 2008, a lot of the fundamentals, but the playbook is the same. You have to do value add, you have to buy really low to outlast this scenario. And in this scenario, there will be more motivated sellers and that means you have more leverage. So use it. That’s the play. That’s what you do in today’s market. But go into this with clear eyes and sober about what’s likely to happen in the housing market over the next couple of years. I hope this analysis helps you do just that. If you have any questions, let me know in the comments. I am happy to answer them. Thank you all so much for watching this episode of On the Market. I’m Dave Meyer, and I’ll see you next time.