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Is there, on the issue of housing, a party that is better suited for this sector? I think this is a real issue and changes would be helpful, as the political course of both parties in recent years has not been very conducive to housing. We had huge demand-side stimulus without much supply under Biden, and under Trump, everything he did was essentially bad for the housing sector.
Between immigration controls, tariffs, and higher interest rates —AI doesn't pay tariffs, but everyone else does. So I think just making changes and focusing on the basics would be helpful. Yes. That's right. Listen, Connor, we're working with a manager, a pretty smart growth executive. I spoke to them on Friday , and they say, "Yeah, we're actually very optimistic about housing next year ." And I feel like I hear this every year, every year you can make the argument that these stocks are super cheap, they're at a bottom, and I reached out to a few of my friends who are real estate brokers.
I asked: What are the arguments for housing growth , other than lower interest rates? So that's the question I wanted to ask you. I'm really not sure. I mean, last month's rally doesn't make sense based on the data, because the data over the last month has been terrible. But I think what some smart analysts are coming to is that, when assessed, “AI collapse” may be too strong a word.
Any rotation from AI—what would that mean? I think that would mean a slowdown in growth, probably a reduction in interest rates. And then the housing sector would work in such a scenario. So, housing can almost become your hedge against AI. I think that's one way to look at it. Kylo, I was watching one of your Instagram feeds.
If you're not following her on Instagram, be sure to follow her. I watched one of the videos where you talked about how your generation might never be able to buy a house. I would really like you to talk about this more. Yeah, I don't remember exactly what video it was , but a lot of my work focuses on the economic ladder, how many of these steps remain out of reach.
So if we think about education, if we think about getting an entry-level job now, it's a little bit difficult. The housing market has long been in a difficult state due to high mortgage rates and prices, which Conor will tell you better than I can. So, yes, I think a lot of young people are quite disillusioned with the economy, which is what we see in the sentiment data.
It will be interesting to see what the results of the midterm elections will be. According to polls, many young people voted for Trump precisely because they wanted a better economy. So it will be interesting to see how they vote this time, and whether they choose a different path. I don't want to open wounds, but the dilemma of Generation X is that people have mortgages at 2-3% and simply can't give them up.
Even if you are True. Unfortunately, I am not one of them. So it's hard for me now. I want to buy a house in Manhattan, but paying a 7% mortgage is very difficult for me . I do n't know. Connor, what should I do? I mean, renting a home in most of the country is quite profitable right now. Of course, not in New York, Houston or San Francisco, but if you look at the rent-to-income ratio in Austin, Nashville or other cities where a lot of apartments have been built in recent years , the prices there are quite acceptable.
So, this is a great time to rent an apartment in Austin , but a bad time for any real estate transactions in New York. Yes, I understand your pain every month. Is it inflation in the rental market or rental prices...by the way, I don't live in New York anymore. I live in Kansas now, it's a whole different world, but I think the last time I heard the average rent for a one-bedroom apartment in Manhattan is $4-5k.
Has this rent inflation started to slow down even a little? I guess, Conor, this question is for you, maybe you can tell me from your experience. You know, I was recently looking for a place to live for my daughter and myself, and...I explained it to my daughter like this. In Hollywood, when you want to make a movie, there's a rule: high quality, fast, cheap, right?
Choose two. If you want quality and fast, it won't be cheap. If you want quality and cheap, it won't be quick. So, in Manhattan, there's neighborhood, price, and size—pick two. And she and I, well, she chose the price and, um, the area, so the apartment was small. And I chose the price and, uh, size.
So my neighborhood was, to put it mildly, not the best. But yes, it's hard. I don't know, Connor, is there anything else to add to that? Well, I think initially during COVID, coastal cities were hit the hardest because people were leaving them for various reasons . Therefore, they didn't have the kind of rent and home price inflation that places like Austin or Florida have.
So you take cities where it was difficult to build before, and where there was no proper price incentive for construction. There is now some momentum for construction, but the results will only be seen in a few years. So the situation will not be optimistic.
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