2025 Housing Market Predictions NO ONE Is Telling You | Ep. 11
Introduction
My feed is filled with people setting their hair on fire, screaming about how the housing market is going to collapse in 2025. And I want to take them seriously. They seem quite sincere. But they've been saying the same thing going into 2024, 2023, 2022. While housing markets are cyclical and crashes do occur, is there new legitimacy to these claims? Let's explore what's really happening.
The Current State of Housing and Debt
Key Numbers
Americans owe more than $1 trillion in credit card debt
7% mortgage rates
Median home prices around $410,000 nationally
Median home payments jumped from $1,500 to $2,400 in recent years
Average credit card interest rates at 24%
Why This Time Is Different
Unlike 2008's bad mortgage crisis, today we're facing a potential crisis driven by consumer debt. The problem isn't bad mortgages—it's the combination of high mortgage payments and crushing consumer debt.
Three Dangerous Trends Converging
1. Rising Essential Costs
Higher mortgage payments
Increased property taxes
Growing insurance premiums
Rising utility and maintenance costs
2. Consumer Debt Crisis
Record high credit card balances
Personal loans at all-time highs
Exploding "Buy Now, Pay Later" debt
24%+ credit card rates
3. Wage Growth Slowdown
Salaries not keeping pace with inflation
Cooling job market
Historic low savings rates
Depleted emergency funds
The Potential Impact on Housing
Different From 2008
Potential wave of voluntary sales and foreclosures
Driven by consumer debt, not bad mortgages
Homeowners have equity but are trapped by debt
Example: $300,000 in home equity vs. $50,000 in high-interest debt
Market Dynamics
Ongoing 4 million home shortage nationally
Possible pockets of increased inventory
Buyers struggling to qualify for mortgages
Regional variations in impact
The Credit Score Cycle
Maxed credit cards lead to missed payments
Credit scores drop
Cannot refinance
Cannot consolidate debt
Stuck with high interest payments
More missed payments
Cycle continues
Advice for Current Homeowners
Look at total debt picture, not just mortgage
Consider debt consolidation while credit is good
Consider selling before forced to if underwater on consumer debt
Explore mortgage modification options
Advice for Potential Buyers
Clear high-interest debt before house hunting
Build larger emergency fund than expected
Be conservative in housing budget calculations
Consider waiting for larger down payment
Market Forecast
Next 6-12 Months
Increase in voluntary sales
Rising inventory in certain markets
Downward price pressure in high consumer debt areas
12-24 Months
Increase in foreclosures
More significant price corrections in overheated markets
Possible credit crunch
Stabilizing Factors
Strong Employment
Most homeowners have stable income
Generally positive job reports
Tight Lending Standards
Current mortgages are solid
Significant homeowner equity
Housing Shortage
Continued supply-demand imbalance
Helps stabilize pricing
Bank Stability
Financial institutions well capitalized
Key Takeaways
Not headed for a 2008-style crash
Facing potential credit-driven housing correction
Watch consumer debt levels as much as housing metrics
Can't time the market—focus on personal readiness
Consider renting if not ready for 5+ year commitment
Remember: This isn't a housing bubble—it's a consumer debt bubble that could spill into housing. Understanding this difference is crucial for making smart decisions in today's market.
Join our free school community at skool.com/diyhomebuyer for more resources and guidance.
