Gary Keller, co-founder of the real estate brokerage Keller Williams, warned that the U.S. economy is entering a “period of discontent” as inflation outpaces wage growth and job creation slows down. Speaking at the company’s 2026 Mega Agent Camp in San Antonio on August 18, Keller acknowledged that the economic outlook isn’t pleasant. “Buyers think it’s 2008, sellers think it’s 2021,” he told the audience. While the unemployment rate sits at 4.1%—a figure typically considered “fantastic” by economists—the latest labor data shows employers are adding fewer jobs, workforce participation is falling, and consumers are spending less. This mix of factors creates a difficult environment where the cost of living rises faster than earnings.
The housing market faces a distinct imbalance where existing-home prices have surpassed new-home prices, a situation Keller called “not nature.” He explained that the current price gap stems from a sharp drop in new home construction during the Great Recession. To correct this, the industry needs about four years of consistent production at 1.7 million new home starts to rebuild the lost inventory. However, a new bipartisan law, the 21st Century ROAD to Housing Act, passed in July, will not provide immediate relief. The legislation focuses on supply-side measures rather than direct funding or zoning changes. Keller noted that the bill relies on suggestions and incentives rather than mandates, meaning it won’t alleviate the challenges facing buyers or sellers right now.
Even as the economy struggles, Keller urged potential buyers not to wait. He emphasized that purchasing a home acts as “forced savings” against inflation. Unlike renters who pay money to a landlord, a homeowner builds equity that remains with them after the mortgage is paid off. “If your income doesn’t get better in 30 years, the home will be paid off, and it’ll be cheaper than renting,” he said. This long-term perspective is key for younger generations who may be hesitant to enter the market due to a lack of understanding about real estate’s role as an investment vehicle. The act of buying builds wealth over time, regardless of short-term economic fluctuations.
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Regarding the ROAD Act, Keller pointed out that the bill provides a framework for long-term improvement. It aims to streamline the process of building homes in areas where they are needed most. While this is a positive step, the legislation lacks the immediate force required to address the current inventory shortage. The gap between new and existing home prices will likely persist until production ramps up significantly. In the meantime, homeownership remains a strategy for stability.
Keller suggested that agents help clients understand the value of locking in a mortgage rate before rates climb even higher. He compared the current market to a “see-saw” that requires balance. Agents must educate sellers on realistic pricing strategies to avoid getting stuck with unsold inventory. By guiding clients through these complexities, professionals can ensure that they make informed decisions. This advice is especially relevant for first-time buyers handling a complex setting.
Looking ahead, the industry faces significant challenges. Builders must overcome regulatory hurdles to increase supply. The ROAD Act offers a path forward, but implementation takes time. Consumers must also adapt to a new normal of higher interest rates. Keller believes that patience and strategic planning will pay off. Agents play a vital role in this process by providing accurate information and support. The market will eventually adjust, but the transition requires careful navigation.