The U.S. housing market is showing serious signs of strain, and the warnings are growing louder. On a recent episode of Making Money on Fox Business, host Charles Payne and ResiClub co-founder Lance Lambert broke down the troubling signals – from surging vacancies to falling affordability. Lambert, known for his sharp market insights, painted a picture of a housing market at a dangerous crossroads. Meanwhile, Payne pointed out how the panic is starting to leak into the headlines, with outlets like Politico calling it a “lose-lose situation.”
This isn’t just market noise. It’s a wake-up call. From the sheer volume of unsold homes to crashing mortgage applications, all the indicators are flashing yellow – and maybe even red.
Zombie Properties on the Rise
One of the most jarring details in the discussion came from Charles Payne, who highlighted that 1.4 million residential properties are now considered “zombies” – homes sitting vacant and unsold. According to Payne, that number is up significantly from previous years and has now stayed high for 13 consecutive quarters. That’s not just a statistical blip; it’s a structural concern. These homes sit empty, dragging down neighborhoods, while simultaneously inflating the illusion of supply.
For everyday Americans, this means more eyesores, less community activity, and falling confidence in local markets. And it’s happening across the country, not just in isolated pockets.
Buyer Power Is Rising – But That’s Not Always Good
Lance Lambert explained that the power dynamic is shifting from sellers to buyers. During the COVID-era housing boom, demand spiked due to ultra-low interest rates and remote work flexibility. At that time, sellers held all the cards. Now, Lambert says, inventory is rising, especially for unsold new construction, and that’s beginning to tilt the scales toward buyers.
But here’s the problem: while there may be more leverage for buyers, there’s also more risk. Prices haven’t collapsed yet, but they’re starting to slide in key regions. And if economic conditions worsen, even the buyers who “won” in today’s market might find themselves holding devalued property tomorrow.
Demand Slowing, Supply Stacking
Charles Payne brought up a key stat that hits home for a lot of Americans: mortgage applications are down for the third week in a row. This includes both new purchases and refinancing. Fewer people are applying for home loans, which signals lower demand, and when demand dries up, prices tend to follow.
Lambert added that supply is also increasing. Builders are being forced to offload unsold homes, often through price cuts and buyer incentives. That increased inventory, mixed with falling buyer interest, sets the stage for a possible correction. And not just a soft landing—a real adjustment that could affect home values across the board.
The Hot Markets Are Cooling First
Using a chart during the segment, Payne and Lambert looked at metro-level housing changes year over year. The red zones stood out – Florida, Texas, and Phoenix. All once “super-hot” markets, they’re now leading the nation in cooling. Lambert noted this trend is typical in housing cycles. The fastest-growing markets tend to suffer the sharpest corrections because they overheat the most during booms.
He pointed out that these areas saw massive migration during the pandemic. Now, as that movement slows and construction catches up, these same regions are seeing demand dry up. That means local economies built on booming real estate might feel the pain first.
Builders in a Bind
Lambert made it clear: homebuilders are feeling the pressure. They ramped up production when the market was red-hot, but now they’re stuck with product they have to move – fast. That means price cuts, deep discounts, and seller incentives. In turn, existing homeowners are now being forced to compete with those discounted new homes, which puts even more downward pressure on resale values.
This domino effect is creating a chilling impact across the entire market. As builders scramble to recover costs, they end up dragging the rest of the market down with them.
A $700 Billion For-Sale Market
Payne mentioned a startling figure: an estimated $700 billion worth of homes are now listed for sale. That number is up more than 20% from a year ago. And while some may question how accurate or inflated that figure is – after all, sellers often list homes at aspirational prices – it still points to a bigger trend.
People want to get out. Whether it’s due to financial pressure, rising property taxes, or just fear that prices are peaking, more and more Americans are putting their homes on the market. But without enough buyers to match, that could spell real trouble in the months ahead.
This Is the Warning Bell We’ve Been Ignoring
What stood out to me most is how familiar this all feels. We’ve seen this movie before. People forget how quickly a hot market can turn cold. Just like in 2008, rising inventory, falling demand, and tightening credit conditions can combine into a perfect storm. The difference now is the context, coming off a historic pandemic boom with millions of Americans having bought homes at peak prices.
This feels less like a “market correction” and more like a market reckoning. The fundamentals – wages, affordability, lending rates – aren’t aligning with where prices still sit today. Something has to give.
Wall Street’s Role: Villain or Hero?
Charles Payne raised another good point: the role of Wall Street investors. During the boom, big firms like Invitation Homes and Progressive Residential swooped in and bought up swaths of single-family homes. Regular buyers often found themselves outbid by corporations offering $50,000 to $100,000 over asking, sometimes in cash. It felt unfair, and for many, it was.
Now, as the market cools, some wonder if those same firms could help stabilize things by becoming buyers again. But Lambert was cautious. He said these institutional investors now make up only about 0.3% of the market, down from a peak of 2%. With falling returns and higher borrowing costs, they’re not nearly as active as they were two years ago.
Affordability at a 40-Year Low
Lambert saved one of the most concerning facts for last: housing affordability is now at its worst level in four decades. When you combine today’s mortgage rates with current home prices and stagnant wage growth, the average American can afford far less than they could even five years ago. That’s bad news for first-time buyers and younger families who are already struggling to find a foothold in the market.
As long as this affordability crisis continues, home sales will stay sluggish, and upward price pressure will be limited. Lambert noted that this “constrained market” favors buyers over time, but only the few buyers who can still afford to play.
Will the Fed Step In?
Payne closed the conversation by asking if the Federal Reserve should consider what’s happening in housing when it decides on future interest rate moves. Lambert answered carefully, noting that even if the Fed cuts rates, it’s unclear how much impact that would have on long-term mortgage rates. But he acknowledged that housing is a key part of the economy, and with affordability at rock bottom, pressure is mounting on the Fed to respond.
Still, Lambert made it clear: the damage has already been done. Lower rates might help a little, but they won’t undo the underlying issues that created this mess in the first place.
A Market Teetering on the Edge
The conversation between Charles Payne and Lance Lambert offered more than just numbers – it gave us a full picture of a housing market in distress. From rising zombie properties to declining mortgage applications, the signs are clear. More sellers than buyers. Hot markets turning cold. And a growing number of Americans who feel shut out of the market entirely.
Whether we’re headed toward a slow correction or something worse remains to be seen. But one thing’s certain: the housing market just sent a warning, and ignoring it could be costly.
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Mark grew up in the heart of Texas, where tornadoes and extreme weather were a part of life. His early experiences sparked a fascination with emergency preparedness and homesteading. A father of three, Mark is dedicated to teaching families how to be self-sufficient, with a focus on food storage, DIY projects, and energy independence. His writing empowers everyday people to take small steps toward greater self-reliance without feeling overwhelmed.