In this episode of the Odd Lots podcast, hosts Tracy Alloway and Joe Weisenthal interview Morgan Stanley housing strategist Jim Egan about the health of the American consumer and the housing market. They discuss the surprising resilience of consumer spending despite low sentiment, pockets of strain in consumer lending, and the increasing inventory of homes. Egan explains that while macro consumer data looks healthy, delinquencies are climbing, particularly in subprime auto loans. The conversation explores the "lock-in effect" of low mortgage rates, the geographical differences in housing supply and prices, and the potential impact of wealth on consumer behavior. They also touch on the longer-term implications of an aging homeowner population and the challenges facing home builders due to tariffs and immigration policies.
