1 min read
Housing: Affordability, Interest Rates, and Economic Impact
David Hagee, Executive Vice President, Chief Investment Officer
Recorded May 13, 2026
In a new episode of the Conversations with Commerce Trust podcast, Chief Investment Officer and host David Hagee is joined by Scott Colbert, Chief Economist and Director of Fixed Income Management, to discuss the current state of the housing market and why housing is so important for the U.S. economy, being the largest consumer household expense and component of gross domestic product (GDP). They examine supply and demand, affordability, housing’s impact on inflation, interest rates, and a broader view on construction in the U.S.:
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Why housing affordability remains near historic lows, with the median home price increased 47% in the last six years while incomes have grown at a slower 25% rate and a doubling of interest rates
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Why many first time homebuyers are unable to afford an entry-level house, impeding their ability to build wealth and drivers behind why new home prices are outpacing inflation
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How higher interest rates continue to slow homebuilding activity and existing home sales
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Why record low affordability contributes to a flat expectation for interest rates going forward
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The role of AI-related data center expansion in shaping regional construction activity and economic growth
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