Why Jaspreet Singh and Ken McElroy Say the Economy Is Forcing Americans to Rethink Real Estate

When I talk about building wealth, I always come back to one idea: you have to understand the game before you play it. Most people look at the economy and only see the headlines. Inflation is up. Mortgage rates are high. Housing is expensive. Debt is exploding. Rents are changing. The Federal Reserve is stuck. But investors have to look deeper. They have to ask why these things are happening, who benefits, who gets hurt, and where the opportunities are being created. That was the real theme of the conversation between Jaspreet Singh and real estate investor Ken McElroy: the economy is under pressure, housing is changing, and the people who understand debt, inflation, cash flow, and supply will be in a much better position than the people who are just waiting for everything to “go back to normal.”

The first big issue is debt. The United States is carrying a massive national debt burden. As of May 7, 2026, the U.S. Treasury reported total public debt outstanding at about $38.9 trillion. That matters because debt limits choices. In the 1970s and early 1980s, the Federal Reserve could raise interest rates dramatically to crush inflation. Today, doing that would be much more difficult because the government itself has to pay interest on a far larger debt load. Higher rates do not just hurt homebuyers and businesses. They also make government borrowing more expensive.

That is why stagflation is such a dangerous word. Stagflation means slow growth or rising unemployment at the same time prices are still rising. It is one of the hardest economic problems to solve because the usual tools conflict with each other. If the Fed cuts rates to support jobs and growth, inflation can get worse. If the Fed raises rates to fight inflation, unemployment can rise and the economy can weaken. In the conversation, the concern was that inflation, AI disruption, high debt, and rising unemployment could all collide at once. That is not a prediction anyone should take lightly, but it is a risk investors should understand.

Housing is where many Americans feel this pressure most directly. Buying a home has become difficult for millions of people because prices rose dramatically while mortgage rates moved far above the low-rate environment of 2020 and 2021. The problem is not just rates. It is also supply. Realtor.com estimated that the U.S. housing supply gap widened to 4.03 million homes in 2025, up from 3.80 million the year before. That shortage is one of the reasons affordability remains so painful.

Ken’s point about the housing market is important: the current market is not the same as 2008. In 2008, many homeowners had little or no equity, risky loans, and weak underwriting. When prices fell, people were quickly underwater, and foreclosures exploded. Today, many homeowners have more equity and fixed-rate mortgages, which reduces the risk of the same kind of forced-selling collapse. That does not mean prices cannot fall. They can. Some markets are already softer. But a nationwide repeat of 2008 is not guaranteed simply because housing is expensive.

The real issue today is affordability. A lot of people want to buy, but they cannot make the math work. High prices plus higher mortgage rates mean monthly payments are out of reach. So more people rent longer. That shifts demand into the rental market. The U.S. homeownership rate was 65.3% in the first quarter of 2026, according to FRED data from the Federal Reserve Bank of St. Louis. That is not a collapse, but it shows that homeownership is no longer moving easily toward the old highs.

At the same time, the rental market is not simple either. A lot of multifamily construction started when money was cheap. Then interest rates rose, construction costs increased, and projects that began in a low-rate world were delivered into a much tougher market. Some cities now have more apartments than demand can immediately absorb, which gives renters more bargaining power. RealPage projected very high apartment deliveries in several markets for 2025, including nearly 35,000 units in New York and about 29,600 in Phoenix. That kind of new supply can pressure rents, raise vacancies, and make life harder for landlords in the short term.

But this is also where long-term investors start paying attention. Real estate cycles are not new. When money is cheap, builders build. When too much supply arrives, rents soften. When rates rise, new construction slows. Eventually, supply gets absorbed, and the next cycle begins. Ken’s point is that investors should not look at one headline and assume every market is the same. Phoenix is different from Cleveland. Florida short-term rental markets are different from stable Midwest workforce housing markets. A market with population growth, jobs, and good schools is different from a market that was overbuilt because everyone was chasing Airbnb returns.

For homebuyers, the lesson is not “buy at any price.” The lesson is to be realistic and strategic. Do not let a lender tell you what you can afford based only on approval amount. Your real affordability is your monthly payment, including mortgage, taxes, insurance, HOA fees, repairs, utilities, and maintenance. A bank may approve you for more than you should actually spend. That is how people become house poor.

At the same time, waiting forever can be its own risk. Some buyers keep waiting for a crash that never comes in their market. If prices keep rising or rates do not fall enough, they may end up worse off. In softer markets, buyers may have more negotiating power. The outline mentioned markets like Phoenix where buyers may be able to negotiate meaningful discounts. That is the mindset buyers need: do not just ask, “Should I buy now or wait?” Ask, “Can I negotiate a deal that works for my numbers?”

House hacking is one creative strategy. Instead of buying a home and carrying the full payment alone, you rent out a room, basement, guest unit, or part of the property to help offset the mortgage. It may not be glamorous, but it can be a practical way to get into ownership when affordability is tough. Rent-to-own can also work in certain situations, especially when a property has been sitting on the market and the seller is motivated. The key is that you have to be proactive. Deals are not always listed neatly on a website. Sometimes you have to talk to sellers directly, make offers, and negotiate terms.

For investors, the most important word is cash flow. A lot of people buy real estate hoping the property will appreciate. That can work, but hope is not a strategy. If a property has negative cash flow, you have to be able to carry that loss through vacancies, repairs, insurance increases, tax increases, and unexpected expenses. That is risky. A good rental property should be analyzed based on income, expenses, debt, reserves, and realistic rent assumptions.

Ken’s real estate philosophy is built around cash flow, debt, and value creation. The idea is not just to buy a property and wait. The idea is to buy correctly, improve the property, increase net operating income, and increase the property’s value. In commercial and multifamily real estate, value is often tied to income. If you renovate units, add amenities, improve management, and raise rents responsibly, you can increase NOI. Higher NOI can support a higher property value. That can create refinancing opportunities later.

This is where debt becomes a tool. Most people are taught that debt is bad. Bad debt is bad. Consumer debt, credit card debt, and unaffordable debt can destroy wealth. But productive debt, when used correctly, can help build wealth. A fixed-rate mortgage can become cheaper in real terms over time if inflation pushes rents, wages, and property values higher. Tenants help pay down the debt through rent. The property may appreciate. Tax benefits may reduce taxable income. That is why real estate can be powerful during inflation.

But the phrase “used correctly” is doing a lot of work. Debt can also destroy investors who overleverage, buy in weak markets, underestimate expenses, or rely on unrealistic rent growth. Construction loans and floating-rate debt are especially risky when rates rise. Many developers learned that the hard way when projects started in a cheap-money environment became much more expensive before completion.

Real estate also has major tax advantages. Depreciation, cost segregation, bonus depreciation, opportunity zones, and refinancing strategies can all be powerful when used properly. The outline discussed bonus depreciation and opportunity zones as ways investors can defer or reduce taxes. It also highlighted that refinancing can allow investors to pull out equity tax-free because loan proceeds are debt, not income. These are real strategies, but they require expert guidance. The tax code can be used legally and intelligently, but mistakes can be expensive.

One example from the conversation involved value-add investing. Suppose an investor buys a property, renovates units, adds washers and dryers, improves fixtures, upgrades flooring, and increases rent by $125 per month per unit. That additional rent increases income. If expenses are controlled, NOI rises. If NOI rises, the property may become more valuable. Over time, the investor may refinance, pull out capital, and continue owning the property. That is how real estate investors can build wealth without selling and triggering taxes.

But again, this only works when the numbers work. New investors with $10,000 to $50,000 should not think they need to jump straight into large deals. They need to learn how to analyze cash flow, build reserves, understand repairs, and choose markets wisely. Midwest properties may cost much less than Arizona properties, but rents are not always proportional to price. A $150,000 house in one market may cash flow better than a $400,000 house in another. The deal matters more than the dream.

The best markets usually have strong employment, population growth, diversified industries, good schools, and long-term rental demand. The most dangerous markets are often those where everyone is chasing the same hot trend. If a city was overbuilt because short-term rentals looked easy, investors need to be careful. If a market depends too heavily on tourism, one industry, or speculative demand, cash flow can disappear quickly.

For renters, the current market may offer more opportunity than it has in years. In some cities, landlords are competing harder for tenants because new apartment supply has increased. That means renters may be able to negotiate. Ask about one month free, lower rent, reduced fees, parking, upgrades, or flexible lease terms. In a tight market, landlords have the power. In a softer market, renters should not be afraid to ask.

For homeowners, the message is different. If you already own a home with a low fixed-rate mortgage, that can be a very valuable asset. You may not love your home, but your mortgage could be hard to replace. Selling and buying another property at today’s rates can dramatically increase your monthly payment. That does not mean you should never move. It means you should run the math carefully.

For the economy, the big picture remains complicated. Inflation, oil prices, debt, interest rates, AI disruption, and housing affordability are all connected. Higher oil prices can feed inflation. Higher inflation can keep the Fed from cutting rates. Higher rates can slow construction and make homes less affordable. Slower growth can increase unemployment. High debt limits the government’s ability to respond. This is why the road ahead is not simple.

But here is the key: economic problems do not eliminate opportunity. They change where the opportunity is. Inflation hurts savers but can help owners of hard assets. High rates hurt overleveraged borrowers but can create better deals for disciplined buyers. Rental oversupply hurts weak landlords but creates opportunities for strong operators. Housing shortages hurt buyers but support long-term demand in the right markets. Volatility punishes people without a plan but rewards people with cash, patience, and discipline.

That is why I do not believe in waiting for the perfect economy. There is no perfect economy. There is only the economy we have and the decisions we make inside of it. If you want to buy a home, be realistic, negotiate, and do not overextend. If you want to invest in real estate, focus on cash flow, location, reserves, and management. If you already own property, understand the value of your debt and the tax tools available to you. If you are renting, use softer markets to negotiate better terms.

The people who struggle the most are the ones who only react. They buy when everyone is excited. They sell when everyone is scared. They wait for certainty, and by the time they feel certain, the opportunity is gone. The people who build wealth learn how to study the cycle, understand the risks, and make moves when the numbers make sense.

The economy may be difficult. Housing may be expensive. Debt may be a problem. Inflation may not disappear overnight. But that does not mean you are powerless. It means you have to get smarter. Learn the rules of money. Understand debt. Study real estate. Build cash reserves. Negotiate. Look for cash flow. Protect yourself from bad deals. And remember that every economic crisis creates two groups of people: the people who get hurt because they were unprepared, and the people who were prepared enough to find opportunity.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence