It can’t be easy. Redfin stock reached a high of more than $95 per share during the pandemic and its corresponding housing boom, but it’s trended downward ever since, landing at around $5.50. It’s been a rough ride; revenue dropped last year, and agents were cut. It goes beyond Redfin; all of the housing world suffered as the Federal Reserve raised interest rates. “Losing 40% of our agents is a tragedy,” Kelman told Fortune. “I feel personally responsible for it. I was the one who signed their offer letters in spirit, if not, in fact. And I failed to grow the business to the extent that we could keep them all busy … It’s just hard when the number of homes sold in the United States drops from 6 million to 4 million.”

Last year, existing home sales fell to their lowest point in almost 30 years. The housing market froze, and it’s only just begun to thaw. Mortgage rates were the highest they’ve been in more than 20 years, and they’ve come down since, but are still high compared with those of the pandemic. In the past week or so, mortgage rates surged again, reaching their highest level in months, 7.50%. Home prices are high, too. “The cost of buying a home has gone up again, and prices haven’t come down,” Kelman said. “So the Fed keeps trying to tame inflation with rate increases, but at least one sector is untamable, and that is housing.”

It’s anxiety-inducing, he said. Housing is a basic need, and would-be buyers who held out last year are tired of waiting. Millennials who’ve delayed starting a family, putting off plans, can only wait so long, Kelman said. He’s never seen anything like it, calling it the “worst situation” for the housing market. “Housing is in this recession, and the rest of the economy is booming,” he said.

“I was the CEO during the Great Financial Crisis,” he continued. “Sales volume went down but prices did, too.” One problem fixed another, Kelman said. Usually when sales decline, prices drop too, and then sales increase later—that’s the cycle, he said. Homes become affordable again, and sales pick up because of it. This situation is very different. Interest rates are up, and sales volume has fallen through the floor, as he put it, but home prices haven’t followed. “Some of that is just this artifact of 30-year mortgages,” he said. Everything the Federal Reserve is doing has no real effect on homeowners, apart from keeping them where they are. “It actually has the perverse effect of keeping home prices high,” Kelman explained.  

He doesn’t know that mortgage rates will go up significantly through the end of this year; they could even come down, depending on inflation. He thinks sales will improve, and they’ve already been better than he’s expected. That’s because people need homes—it’s not a “fad to own a house,” and there’s a “deep-seated human need to own a home, where you’re going to raise your family,” he said. Still, the problem goes beyond the latest spell of unaffordability, and has more to do with building homes. 

“For the longest time, housing was getting very expensive, but money was getting cheaper,” Kelman said, and a product of the pandemic made it so people could move anywhere they wanted: remote work. Californians became Texans and Floridians, but all the buffers are gone, he said. The people who were going to move already have, and money isn’t cheap anymore. The only way to solve the problem is by building homes. 

“The basis of the American dream was that there was more land here than there was in Europe,” he said. “And for the longest time, the government was very aggressive, working with builders to create more housing.” But eventually that changed, with what Kelman called well-meaning laws to protect the environment and give people more control over what kind of housing was built in their neighborhoods. That backfired, and it became much harder to build anything. “The left, as well as the right, have really struggled to solve the affordability crisis,” he said. 

California is probably ground zero, Kelman said. For years, its housing crisis worsened because of policy failures and unfettered local control. Initiatives were drawn up to change local regulations surrounding land use, and they failed time and time again. But finally, they didn’t. Kelman said it’s an encouraging sign, and finally people are talking about housing at all levels of government because something needs to be done. “Biden’s basic problem with millennials is how optimistic can you be about the economy from your parents’ basement?” Kelman said. 

‘If we were completely undressed in public, we would have nothing to fear’

Apart from deteriorated affordability, there’s another thing that’s rocked the housing world: the National Association of Realtors’ $418 million settlement. “NAR had to settle—it was existential,” Kelman said. “Every judgment in the Missouri case had gone against them, and that was a precedent that other courts would follow, so they had to.”

Redfin’s commissions model has always been different from, and lower than, the industry standard, so it’s not clear what will change at the company. The “opacity of pricing in the real estate industry,” he suggested, might have actually kept people from selling and buying with Redfin. 

“Our great frustration as a business has been normally, when you offer better service for less money, the world beats a path to your door,” he said. “And Redfin has grown from zero to a billion dollars on that premise. And yet, I think we could have grown more if consumers were value driven … The more clearly buyers understand the value of what we offer, the more sales we’ll get.”

Even so, Kelman said he doesn’t know that the housing market will be affected following the settlement. If anything, the change in commissions seems to benefit sellers; it won’t make housing more affordable. He’s not endorsing the settlement by any means, because for one, it still needs to be approved—and there’s no way to know for sure how everything will shake out. Of course, Redfin is facing its own commissions lawsuits. He wouldn’t comment on whether he’s at all worried; instead he said the company was in a good position and that its sole existence for 18 years has been to give people a better deal. “If the world knew more about Redfin, if we were completely undressed in public, we would have nothing to fear,” he said. 

While Kelman holds a 2% stake in Redfin, he is the lowest paid person on his executive team. He takes home $300,000 a year in a cash salary, and requests that he only get a bonus if positive net income is achieved, basically if the company makes money after paying expenses, which it hasn’t in the past three years. It’s not often you see that. 

“My board asks me that question every year,” he said. “I don’t really know what to say. I feel like I’ve made a king’s ransom off this company. I’m the luckiest person in the world to be able to run it, and what’s wrong with America is that so many capitalists are really engaged in a form of plunder. And I don’t know how to lead except by example.”