Housing Market Crash in The USA: Separating Fact from Fiction

Today's video is a housing market update. Let's talk about home prices, mortgage interest rates, and predictions for 2025. So here's the most recent data, which is October, because November hasn't ended yet. In the US, median home prices have gone up by 5.1% compared to 12 months ago. Okay, so I'm well aware that that is a very difficult pill to swallow for people who've been saying that there's a housing market crash. It's right around the corner. And then they get defensive because they hear that home prices have gone up. And then they get very defensive. They say, oh, national prices. That doesn't matter. Real estate's more about localities. So the local markets. Okay, then let's look at the local markets. They say Florida is the worst of it. So let's look at Florida. In Tampa, home prices are down 2.3% compared to their peak from 2022. Home prices are down a whopping 0.4% compared to last year. So take a look at the home value index of Tampa. So sure, home prices have stopped shooting up, but they're not crashing. Okay, so the crash callers are wrong in Tampa, Florida. So let's take a look at Miami. Home prices are up 2.3% compared to 12 months ago. So look at the chart. Home prices have not crashed in Miami. Or maybe we just have different definitions of what a housing market crash is. So let me ask this question to people that are watching from Florida. And this is a sincere question. My question is, are homes now affordable in Florida? Because apparently a lot of YouTubers, content creators have been saying that the housing market has crashed in Florida. So I'm not talking about dilapidated homes in unwanted areas. I'm talking about, are there many good homes available at affordable prices in Florida? Because apparently people have been saying there's been a severe housing market crash in Florida. Let me know. So listen, I want to tell you this. I understand that many YouTubers have been telling you that there's going to be a housing market crash in 2021, 2022. Now it's 2023. Oh, it's pushed back to 2024. Oh, now it's 2025, right? So I want to explain this to gullible people to hopefully cure the gullibility. I understand that if you're looking to buy a home, I understand, I mean, it's logical why you want home prices to crash so that you can buy an affordable home, a home in a very affordable price, right? However, many YouTubers have been telling you that home prices are going to crash to get your hopes up when clearly it's not happening. And they're just click baiting you. Like this is very straightforward. They click bait you because they make more money off those click bait videos and they get your hopes up. They give you bad information. And sadly, a lot of people are relying on that information and it's bad information. So again, median home prices in the US are up 5.1% compared to last year. But I want to show you this heat map of markets that are still hot and rising and where they're cooling. So as you can see, there's been no relief in California and the Northeast. Okay, so look at San Francisco. Home prices have fallen 10% from its peak, but prices are trending back up again. Home prices are up 1.4% compared to last year. Los Angeles is at basically near record highs. Home prices are up 4.6% this year. New York City home prices are up 7% this year. Now let me answer these frequently asked questions. So is there a housing market bubble? The answer is yes, of course there is. Does that mean that home prices must come down? The answer is no. Home prices can, even in a bubble environment, the bubble can get bigger. Home prices can still keep shooting up. Now I want to ask you this. How much was the median home price in the US in 1990? It was $120,000. Do you think, well, home prices right now, they're above $400,000. They're so high, so prices have to revert back down. They have to go back down to $120,000. Is that how it works? No, of course not. I'm going to be realistic. How much was the median home in the US in 1950? It was $7,000. A median home in the US costs seven grand. So, okay, well, if you look at home prices now compared to 1950, well, okay, I guess prices have to crash back down to $7,000. No, that's not how it works. That doesn't make sense. If you didn't get the memo, home prices in the long run, they just go up. Now, if you're trying to time the housing markets to wait for that crash, for that perfect opportunity to buy your home, I want to tell you this story. And in this story, you can be the judge, whether my friend in this story is an idiot or not. So this is a story. My friend bought a home in Austin, Texas back in 2007. So this is right when homes are basically at their peak. After he bought the home, shortly after, prices went down and then they eventually crashed. So he held the home since then. He still has a home. That home has gone up in value by about $500,000. I have my other friend. He bought a home in Austin, Texas in about 2010, so a few years later. So this is close to rock bottom prices. He's held the home since then. So since then, that home has gone up in value by about $550,000. So listen, my first friend who had bad timing, he bought near the peak. Since then, he's up about $500,000 on his property. If he just waited a few more years, just waited for the crash, then he would have been up $550,000 like my other friend. But instead, he's only up $500,000, like what an idiot, right? I talk about having it bad. So listen, do you see what I'm saying? Over the long run, home prices just go up. Are home prices expensive right now? Yes, absolutely. Nobody's going to deny that. But it's just going to get worse in the future. And in the short run, who knows what's going to happen. In the short run, home prices can just keep on going up. Now let's move on to predictions for home prices in 2025. So it's a wide range. Goldman Sachs predicts that home prices will go up by 4.4% next year. Moody's predicting on the low end, 0.3% up. The average forecast is that home prices will go up by 2.6% next year in 2025. Now, if you believe that Americans are going to struggle next year, that there's going to be many foreclosures, home prices are going to plummet because of that, let's address that. So here's a chart of serious delinquencies, which is 90 days late or more. So this is on mortgages and HELOCs, home equity lines of credit. So let me know when it starts shooting up. So that I can put it on my calendar that home prices will crash three years later. Now let's talk about mortgage interest rates. So I said that the 30-year fixed, it would be very difficult for that to get above 7%. So here it is currently at 6.84%. That's the 30-year fixed on the left. It's getting close to 7%, but still, I don't see it differently. We should see the reversal soon enough. The situation is that mortgage rates are correlated to the interest rate on the 10-year yields. It had a temporary bounce, but it should be topping out here and resume its downward trend. So I understand that mortgage rates are not falling as quickly as borrowers would like. However, I was clear that it would be a slow process. Now 2025 is approaching very quickly. I'm going to make the same prediction for 2025 as I did for 2024. 2024, I said home prices will be a slow grind upward. It's going to be a very uneventful year. No housing market crash. So the institutions, I just showed you a chart. They're predicting a small rise in home prices, 2%, about 2.6%. I would agree. It's going to be the same story. It's going to be low inventory. It's going to be a lock and effect. The Federal Reserve has a looser monetary policy, and it's just going to be an uneventful year. It's going to be no housing market crash. So listen, if you want a housing market crash, there simply needs to be more homes available for sale. It's more supply than demand. The number of homes available for sale is at 1.8 million. So being at 2.25 million, that would be back to normal levels. That's not even crash levels. So we have a long way to go. And listen, I showed you the delinquency data that's very low right now. Are Americans struggling right now and living in the rat race? The answer is a clear-cut yes. However, people are still getting their mortgages paid. So how probable is it that all of a sudden in 2025, things will just turn on a dime and millions of Americans just suddenly stop paying their mortgages and massive foreclosures? It's possible, but not probable. Okay, so you can let me know in the comments down below what you think. For people that have been calling for a housing market crash in 2021, 2022, 2023, 2024, and now 2025, let me know your brilliant reasoning why it's been pushed back just a little bit longer, right around the corner. And I just want to point out that you do know that if in a few years, if home prices go up by 25% and then crash by 20%, then home prices really didn't crash, right? Just saying. All right, please subscribe. Thank you for the support. I wish you a very nice day. Take care.