By News Editor 
On Sachs Realty, a Youtube channel dedicated to injecting transparency into the housing market, recently hosted Housing Analyst, Lance Lambert, who talked about major factors contributing to housing market dynamics.
Institutional Investors
One of the reasons that houses have continued to be out of reach for most Americans is that large instituional investors, groups that own 1000 houses or more. Currently, the United States has the lowest volume of transactions since 1995, but there are more than 70 million people in country. Thus, when controlling for the population, there should be a great worry about the lack of transactions.
Large well capitalized players emerged inthe housing market due to the Pandemic housing boom making rents, cash flow and margins very favorable, accoridng to Lamber. Institutional investors were attracted to the large appreciation as well, but then he notes that just a year after the initial boom in interest. Investors saw that the speculation was immediately rewarded then, but eventually all the homes that were worth the risk.
Bigger players looked for cash flow due to regional bank lending restrictions and a simultaneously lucrative rents from guarantees provided by federal housing subsidies via section 8.
Market Softening
The issue here is that the usual patterns for cyclical buying patterns have not returned. “We do not see the seasonal pickup typically associated with the beginning of the spring selling season. So we continue to lean into our machine focusing on converting leads and appointments and adjusting incentives as needed to maintain sales pace. These adjustments came in the form of mortgage rate buydowns, price reductions, and closing cost assistance,” Jon Jaffe, co-CEO of Lennar, said on their Friday earnings call.
The U.S. housing market is currently exhibiting significant regional disparities, particularly between the Northeastern states and areas like Texas and Florida. These differences are influenced by factors such as housing inventory levels, buyer demand, and economic conditions.
Northeastern Housing Market
In the Northeast, the housing market remains tight, characterized by limited inventory and strong buyer demand. This scarcity has led to competitive bidding situations and rising home prices. For instance, in Wyckoff, New Jersey, a four-bedroom ranch attracted numerous offers and sold for $200,000 above the asking price . Similarly, New York City experienced a 7.7% annual gain in home sales prices as of January 2025. These trends indicate a robust market where demand outpaces supply, driving prices upward.
Over the past three decades, the disparity between median household income growth and average mortgage payments has widened. In 1990, the median household income was approximately $29,838 , and the average 30-year fixed mortgage rate was around 10.13% . By 2023, the median household income had risen to approximately $80,730 , while mortgage rates fluctuated, reaching as low as 2.65% in January 2021 and rising to around 6.65% by March 2025.
Despite the increase in incomes, the proportion of income required for monthly mortgage payments has grown. In 2022, mortgage payments consumed about 31% of the median household income, increasing to nearly 34% in 2023 . This trend underscores the growing affordability challenges faced by prospective homebuyers, as mortgage payments constitute a larger share of household income.