How bad the housing sector is today… will the White House come to the rescue?… the housing stocks Luke Lango is eyeing… don’t expect substantially lower prices… VIEW IN BROWSER On Wednesday, just minutes after the Federal Reserve announced a quarter-point interest rate cut, legendary investor Louis Navellier ripped into members of the Fed: They are ostriches with their head in the sand, and they are oblivious to what’s going on. Behind Louis’ frustration was the latest dot plot – the forecast of where interest rates will be in the coming months. It revealed that members project fewer rate cuts than Louis believes our economy/housing market need going forward. From Louis: The reason the Fed needs to cut [interest rates] is the Commerce Department reported on Wednesday that new housing starts declined substantially at only 1.3 million annual pace, down from a 1.3 million pace in July. And this was far below economists’ expectations. Here’s the problem, folks – everybody’s discounting homes, okay? There are layoffs in the construction industry in the last four months, so this is part of the unemployment problem. So cut rates, get everybody buying homes again, and fix this part of the economy. But they’re not doing that. How bad is housing, exactly? Brutal. According to Visual Capitalist, the median U.S. home price in 2025 is about $416,900, while the median household income is around $83,150. That’s a price-to-income multiple of 5X. In 1985, that same ratio was about 3.5X – the typical home then cost roughly $82,800 versus $23,620 in median annual income. 
Source: Voronoi by Visual Capitalist But that stat doesn’t capture the problem clearly, so let’s try to drive this home… When adjusted for inflation, if we compare the median price of a home in 1965 with the median price in 2024, home prices last year were 100% higher. - 1965: $202,215
- 2024: $420,800
And let’s make sure we’re clear – this is an apples-to-apples comparison – zero inflation, just an extraordinary price markup. For many households, the gap between income and today’s median, runaway home price creates an impossible situation. Homeownership is pushed from “ambitious” to “unattainable” – unless incomes rise fast, rates fall, or prices correct. Here’s more from our hypergrowth expert Luke Lango: By almost every measure, affordability is at all-time lows… Unfortunately, supply is stuck near record lows as well. As of July 2025, America’s housing shortage has grown to an all-time high of 4.7 million units, according to research from Zillow. Younger people can’t afford to buy. Older homeowners aren’t selling. New construction hasn’t kept up with demand. The result? The worst housing crisis in modern U.S. history. | Recommended Link | | | | One company to replace Amazon… another to rival Tesla… and a third to upset Nvidia. These little-known stocks are poised to overtake the three reigning tech darlings in a move that could completely reorder the top dogs of the stock market. Eric Fry gives away names, tickers and full analysis in this first-ever free broadcast. Watch now… |  | | The White House is mulling options Let’s go to Reuters from earlier this month: President Donald Trump's administration plans new measures to tackle the high cost of housing in the coming weeks, U.S. Treasury Secretary Scott Bessent told Reuters in an interview on Monday. Emphasizing the urgency of the situation, Bessent described it as an "all hands on deck" challenge. Bessent told the Washington Examiner in a separate interview that Trump may declare a national housing emergency this fall to address rising prices and dwindling supply. Luke writes that the White House could provide tariff and material-cost relief, incentives and grants for first-time buyers, down-payment assistance, streamlined permitting, changes in housing finance, even the use of federal land for new development. This could be big – both for housing and the stock market. Here’s Luke: Individually, none of these measures would fix the housing market. But combined, they could meaningfully boost both supply and demand within a year. And that’s the sort of synchronized intervention that could trigger a housing boom unlike anything we’ve seen since the post-financial-crisis rebound nearly two decades ago. If that happens, the market will thaw; and housing stocks should fly… Meaning, this is a prime time to start accumulating housing-related names. How do you invest? Luke begins by pointing toward the obvious choices, the well-known homebuilders. This list includes Lennar (LEN), PulteGroup (PHM), DR Horton (DHI), KB Home (KBH), NVR (NVR), Toll Brothers (TOL), Meritage Homes (MTH), and Green Brick Partners (GRBK) – what Luke calls “the blue chips of America’s housing construction industry.” But for the biggest potential gains, Luke recommends looking elsewhere – housing tech: I’d go a step further: Zillow (Z): The closest thing we have to a digital super-app for housing. If more buyers flood the market, Zillow becomes the go-to platform, especially for millennials and Gen Z. Opendoor (OPEN): The iBuying model thrives in higher-volume markets. If Washington can thaw out supply, Opendoor’s algorithm-driven instant offers will look increasingly attractive to sellers. Compass (COMP): A tech-first brokerage that could win market share as agents flock to platforms offering better digital tools. Rocket Mortgage (RKT): A policy-driven housing boom paired with falling mortgage rates could unleash a massive refi wave. And Rocket dominates that space; perhaps the biggest winner of them all. We’ll circle back to the performances of these stocks in the months to come. But per Luke, this is your official starting gun: Now is the moment to start building exposure. Whether through the builders or the tech disruptors – or both – investors who position ahead of a National Housing Emergency declaration could be looking at one of the strongest tailwinds of the next 12 months. But for the housing market to fully thaw, interest rates need to come down materially – will that actually happen? While Louis was disappointed in the Fed’s projections for rate cuts, Luke believes the volume of cuts that the housing sector needs are coming: The Fed didn’t slam the door shut on more cuts. It simply refused to pre-commit. And guess what? The data is trending in a direction that supports further easing. Inflation is steady – not exploding. Labor markets are softening around the edges. And growth, while solid, is not running away. Altogether, the case for further cuts remains intact. That’s why we continue to believe the Federal Reserve will cut four to five times over the next 12 months. If the Fed cuts rates four or five times over the next year, mortgage rates will almost certainly move lower – not in lockstep with Fed funds, but enough to bring the average 30-year fixed down meaningfully from today’s ~6–7% range. How much lower? Let’s do some crude, back-of-the-napkin math. As I write, the average Freddie Mac 30-year mortgage rate is about 6.26%. This rate tracks the 10-year Treasury plus a spread. According to HousingWire, historically, that spread typically sits around ~1.6–1.8 percentage points (though it can widen in stress), and the 10-year tends to move with expectations for Fed policy and inflation – though not always, as we saw last fall. So, if the Fed’s new rate-cutting regime knocks down the 10-year yield by, say, 100 basis points, a reasonable range for the 30-year mortgage would be roughly 4.5% to 5.5% (10-year at ~3.0–3.8% plus the average historical spread). Great news, right? The double-edged sword of lower mortgage rates Lower mortgage rates would be great news for investors taking advantage of stocks like those Luke highlighted above… But perhaps not-so-great for would-be homebuyers who are on the cusp of housing affordability. Lower borrowing costs would revive affordability at the margin, pull more buyers off the sidelines, and drive up demand. That will lead to bidding wars and higher prices in tighter markets where inventory remains scarce. So, any affordability gains from cheaper financing will be offset by higher prices from the influx of new buyers. Eventually, if rates keep falling while new inventory hits the market, we’ll work through this messiness, but it’ll take a while. Perhaps a long while since, as Louis noted, we’re seeing layoffs in the construction industry. Maybe that down-payment nest-egg you’re accumulating is better allocated into that housing tech stock? Regardless of how this turns out, the Fed is now on the rate-cutting path, which is good news It might have stops and starts, but we’re moving – and that’s something to cheer. Here’s Luke to take us out: Markets often stumble at the start of new easing cycles because investors want certainty. But certainty is never handed out for free. What matters most is that the Fed has pivoted, and the macro data supports more easing ahead. That’s bullish, plain and simple. Have a good evening, Jeff Remsburg | 
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