If 7% Mortgages Are The New Normal, What Happens To American Housing?

For the last several years, we've been asking the same question: When are mortgage rates coming back down? Well, today I want to stop asking that question. Because right now we're looking at mortgage rates above 7%. The 10-year Treasury has moved above 5%. And today the 30-year Treasury reached a level we haven't seen since 2002. https://www.reuters.com/business/us-s... So here's my question: What if rates DON'T come back down anytime soon? I'm not predicting that. Nobody sitting at this table knows where rates will be two years from now. But let's conduct an experiment. Let's assume 6%, 7%, maybe occasionally 8% mortgages remain part of American life. Then we have a problem. Because we can't keep solving a 2026 affordability problem by waiting for 2021 to come back. Something has to change. Maybe home prices change. Maybe the houses themselves change. Maybe we build them smaller. Maybe we finance them differently. Maybe sellers have to change their expectations. Maybe builders change what they build. Maybe buyers change what they expect their first home to look like. Maybe families start living together differently. Or maybe... ALL OF IT changes. So today Cory, Dwight and I aren't predicting mortgage rates. We're asking something I think is much more interesting: How does American housing have to change if rates stay right where they are?