Lance Lambert on Why Housing Just Went Back to the First Inning

I sat down with Lance Lambert, co-founder and CEO of ResiClub, for 84 minutes on my channel. Lance tracks home prices, inventory and builder data across hundreds of markets, and he was early in calling the Sun Belt softening. The full conversation is below, followed by the takeaways I think matter most if you own, are buying or are investing in Florida.

1:24:07 · Jon Brooks on YouTube · recorded with Lance Lambert, ResiClub

Key moments

• 0:00 Where the US housing market stands today
• 3:23 How the pandemic boom created this correction
• 7:34 What builders are doing and why they keep building
• 12:06 FHA buyers and new-construction risk
• 19:29 Northeast vs. Sun Belt, and the markets getting frothy
• 25:58 Why migration is cyclical
• 31:24 Which inning are we in?
• 46:45 Investor math: cash flow and carrying costs
• 1:06:45 Florida's Amendment 3, property taxes and resale turnover
• 1:16:56 Will national home prices go negative this year?

The short version

• Affordability for a financed buyer is about the worst in 40 years, and the jump to roughly 7.5% mortgage rates (from 5.99% in February) erased much of this year's progress.

• Lance had the affordability correction in about the third inning. In his words, "the rate swing took us back to the first."

• The boom markets that ran 60% to 80% are giving back gains fastest. Austin is down 27% from peak.

• Jacksonville is not one market: some pockets are down about 20%, some about 10%, some close to flat, and new construction may be down 15% to 25% once incentives are counted.

• Nationally, he expects prices to finish the year close to flat, which already sits in the bottom quarter of history for nominal price growth.

1. Why affordability went backwards

Lance opened with the core problem: put home prices, incomes and borrowing costs together and this is about the worst affordability for a buyer using a mortgage in roughly four decades. It had been easing. Sun Belt prices softened, new-construction pricing gave ground, incomes inched up and the average 30-year fixed rate touched 5.99% in February.

Then rates climbed back to about 7.5%. What makes this stretch different, he said, is duration: the only other time rates sat this high, in fall 2023, it lasted about a month, and even that sped up the softening. By his math, rates would need to fall roughly 80 to 90 basis points just to get back to where affordability stood earlier this year. Landing right at the start of the seasonal slowdown, that gives buyers leverage, especially with sellers who have been on the market 100-plus days and still need to sell.

2. The boom markets are unwinding in proportion to how far they ran

The pandemic surge hit a housing stock that only grows about 1% a year. Lance cited a Federal Reserve estimate that starts would have needed to rise 300% to absorb that demand. National prices rose about 40%; the boom markets rose 60%, 70%, 80%.

Now the give-back follows the same map. Austin is down 27% from its peak, which wipes out roughly 35% to 40% of its gains. His overvaluation read had Austin about 55% overvalued four years ago and closer to 8% or 9% today. Cape Coral and Punta Gorda looked similar to Austin back then; he now has Cape Coral in the single digits.

3. Jacksonville and new construction: peel back the onion

Lance's point on Jacksonville was that the metro average hides the story. Some parts of town are down about 20% in the data, some about 10%, some close to flat. New-build communities are the hardest to read, because builders move price through incentives rather than list price. On a net effective basis, he said, some of those areas might be down 15% to 25%.

That matches what we see in contracts: rate buydowns, forward commitments and closing credits doing the work a price cut would. Lance described builders as something close to forced sellers on finished, unsold homes, since every month a completed house sits costs them. He pointed to Lennar's average selling price net of incentives, down 24.2%, and said that by his math about a third of that decline is mix shift (smaller homes, more sales in lower-priced regions), with the rest coming from affordability adjustments.

4. Investor math still does not work at most prices

For investors, Lance's bar was a return in the 10% to 11% range and real cash flow, not appreciation hopes. He relayed a conversation with an institutional buyer who said even a 150 basis point drop in rates would not make their numbers work. He also warned about what follows a boom: property taxes and insurance reset higher with prices, and repairs cost more. His example was a roof running about 40% more than it used to.

Owner-occupants are different, because the comparison is your rent rather than a portfolio return. He called that math "choppy," but less punishing than the investor case.

5. Florida's Amendment 3 and property taxes

I asked Lance about Amendment 3 and a headline claiming that if it passes, Florida prices would rise. He had not seen the underlying report, and neither had I; the assumptions were not published. His broader answer was that the housing cycle usually outweighs policy changes in the short run. He compared it to the condo shock after Surfside: stricter condo standards hit hard because prices had already run up and were under pressure, and the same changes in a 2016-style bull market would likely have been absorbed.

He also explained why property-tax caps matter less in Florida than in a state like California. Caps can lock long-time owners in place and slow turnover. But Florida has the highest natural rate of resale turnover of any state, largely because so many older owners eventually sell. In a market with downward pressure, that turnover pushes price changes into the comps faster. He called it "probably like the sixth factor" in his Florida view, but a real one.

6. Will national home prices go negative this year?

Lance ranked three separate "recalibrations." The nominal price correction in the Sun Belt is furthest along. The overvaluation correction comes next. Affordability will be the slowest of the three to recalibrate.

On national prices, he expects the major repeat-sales indices to land pretty close to flat for the year, with real, inflation-adjusted declines. Two caveats stood out. First, near-zero growth is historically weak: it sits in the bottom 25th percentile of nominal house price growth. Second, the indices can understate softness. If a seller now has to remodel a kitchen or give thousands in rate buydowns and closing costs to get the same price as three years ago, that is a real decline that may never show up in the headline number. He also flagged Indianapolis as getting frothy, with risk of a long stretch of little appreciation, and said Chicago, his long-time low-risk proxy, is still only slightly overvalued.

What this means if you are in Florida

Lance was careful not to give buy or sell advice, and so am I. These are the property-level checks I would take from the conversation:

• Price the pocket, not the metro. A 20% decline in one subdivision and a flat reading in another means the county number tells you very little. Start with our home value reports and community pages.

• Compare resale and new construction net of everything. Price, incentives, rate buydowns and closing credits together are the real number. Our Jacksonville new construction pages track builder communities nightly, and our new construction vs. resale guide walks through the comparison.

• Put carrying costs in the deal. Insurance, property taxes, any CDD or HOA, and roof and HVAC age can move a deal more than list price. See Florida property tax and Florida insurance.

• Look for motivated sellers. Lance's simplest takeaway: do the math, do the research, and look for deals where someone has to sell.

Figures are as stated by Lance Lambert in the October 14, 2026 interview and reflect his analysis at the time; they are not a forecast by Momentum Realty. Momentum Realty · Jacksonville, FL · Equal Housing Opportunity.