Jim Egan on the Mortgage Gap That's Dividing America

Odd Lots

Bloomberg

News, Investing, Business, News Commentary, Business News

4.4 • 1.6K Ratings

🗓️ 16 June 2025

⏱️ 40 minutes

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Summary

Somehow, the American consumer remains quite strong. Despite higher interest rates, tariffs, general economic uncertainty and so forth, people are continuing to spend. And yet there are some pockets of weakness that you can observe, especially if you look at delinquency data for various types of credit. But even here the patterns aren’t totally obvious, as it doesn’t break down nicely among prime vs. non-prime borrowers. But there is one important divide: Do you have a ZIRP-era mortgage or not? According to Morgan Stanley housing strategist Jim Egan, there is a massive difference in how strained people are for those who locked in their housing costs prior to 2021 vs. those who didn’t. People with ZIRP-era mortgages are benefiting from low stable payments (which have declined on a real basis), as well as broad equity accumulation. Those who didn’t are much more strained in their finances. We discuss how this is playing out, as well as the state of the housing market more broadly, which has seen rising inventories, and the possibility for an overall downturn in prices nationwide.

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1:02.8	Bloomberg Audio Studios. Podcasts Radio News. Hello and welcome to another episode of the Odd Lots podcast. I'm Tracy Allaway.
1:17.8	And I'm Joe Wisenthall.
1:19.2	Joe, there's been this very long running now. It feels conversation about the health of the American consumer.
1:26.2	Yes.
1:26.5	You've seen all that commentary, right? So you see
1:29.2	these headlines that are like consumer debt at a record high. And you see some of the sentiment
1:34.6	surveys, which have for the past two years been coming in pretty bad. They started to look kind of
	...

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