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

<p>For the last several years, we've been asking the same question:</p><p><b><strong>When are mortgage rates coming back down?</strong></b></p><p>Well, today I want to stop asking that question.</p><p>Because right now we're looking at mortgage rates above 7%.</p><p>The 10-year Treasury has moved above 5%.</p><p>And today the 30-year Treasury reached a level we haven't seen since 2002. <a href="https://www.reuters.com/business/us-stock-futures-flat-tech-bounce-meets-crude-driven-caution-2026-09-29/?utm_source=chatgpt.com" rel="noopener noreferrer nofollow">Reuters</a></p><p>So here's my question:</p><p><b><strong>What if rates DON'T come back down anytime soon?</strong></b></p><p>I'm not predicting that.</p><p>Nobody sitting at this table knows where rates will be two years from now.</p><p>But let's conduct an experiment.</p><p>Let's assume 6%, 7%, maybe occasionally 8% mortgages remain part of American life.</p><p>Then we have a problem.</p><p>Because we can't keep solving a 2026 affordability problem by waiting for 2021 to come back.</p><p>Something has to change.</p><p>Maybe home prices change.</p><p>Maybe the houses themselves change.</p><p>Maybe we build them smaller.</p><p>Maybe we finance them differently.</p><p>Maybe sellers have to change their expectations.</p><p>Maybe builders change what they build.</p><p>Maybe buyers change what they expect their first home to look like.</p><p>Maybe families start living together differently.</p><p>Or maybe...</p><p><b><strong>ALL OF IT changes.</strong></b></p><p>So today Cory, Dwight and I aren't predicting mortgage rates.</p><p>We're asking something I think is much more interesting:</p><p><b><strong>How does American housing have to change if rates stay right where they are?</strong></b></p>