Home Buyers Are Disappearing. The Housing Market Is Changing Fast

Well, just a few weeks ago we were optimistic that mortgage rates coming down was bringing back buyers into the market just the last two weeks since the Iran war started, we've been seeing buyers basically vanish and it's getting worse. Let's dig into what is causing this and if you're a buyer, do you have the power to negotiate? If you're a seller, it now is the time to really listen in and see what strategies you can use to be successful and if you're a real estate agent, this is the information you should be learning from your brokerage company that they probably are not telling you about. So let's dig in into what is happening right now in the market and as always you can follow me on Fridays.

I'll do a live session for Q&A. I just started that Friday at noon. So this is the data. The number of home buyers in the market have fallen to a record low.

That is this red line here and the the blue line is the number of sellers and you can see that the sellers are dipping off just a little bit. This is actually because of rage quitting. So what happens is the seller has their low rate. They want to sell their house for a certain price.

They can't get the price that they want and they go out to the marketplace and they get frustrated. They blame their real estate agent. They yell at their real estate agent and then they fire their real estate agent. Now some real estate agents are truly really bad, but a lot of the cases are the seller is just so unrealistic with the price that they're going to get based on current market conditions.

They need to realize that the market is no longer in 2021 or 2020. We are now in 2026. We are now in busy season and the market is starting off really painfully because of the oil spike causing the mortgage interest rates to skyrocket in just a short period of time. We were seeing mortgage rates below 6% and then we saw a pop all the way up to 6.4% 6.45% and the buyers on this red line, this has been decreasing since March 2022 when the Fed started raising interest rates.

It made it less and less affordable to be able to make the monthly payments and now it's been drifting drifting drifting lower as time goes on and sellers are slow to respond. And real estate isn't a liquid asset class. So people say, you know, could real estate prices crash? Well, a crash does not happen in a short period of time.

It takes years and it could even take a decade on this cycle to play out because of all the unique factors that are going through the housing market at this point in time. So this is a chart that comes from Reventure Consulting Reventure app. This is great with Nick. Although we disagree on some of our timing of what will happen and when it'll happen and some of the predictions that have happened in the past, I like the person's data.

I like the thought process and a lot of the fundamentals are basically there and I think the fundamentals are right, but the timing of real estate just takes longer to correct and and that's one of the things that I like about Nick is he's he's sharing this data consistently, right? So this is the Reventure Housing Demand Index. I think this is a great idea. It's four variables in one.

It's pending sales, mortgage apps, internet searches for homes and buyer sentiment combined in one. So we saw it go all down to one out of 100 for housing demand, which is basically the worst demand ever in 2025. It's come back just a little bit because we saw rates drop below 7% and now below 6% and now we saw it pop back up and oil is making this demand even worse. So we've had record low demand relative to the 2008-2011 crash.

It's been worse. We're already worse than that time period. You can already see that here. It's recovered just a little bit, but we think it actually could go lower.

We were optimistic it was going to go higher with lower rates, but now with rates moving up, we'll have to wait and see and take it week by week honestly because the headlines are so dynamic at this point in the market and it's moving so fast that we need to stay up to date and that's why you can come to a YouTube channel like this one where I keep you up to date on a weekly basis of all the most up to date information that's impacting the housing market. But here's the thing. The stock market's 5% off the highs. 5% pullbacks are very very common.

10% even. And the other issue is especially in areas like Florida where people do tap into the 401k's to buy a house. If they see their stocks falling, then they're unlikely to go buy a house. So if we see a stock decline of 10, 15, 20%, I could see a situation where the demand goes even lower than it is today and it could really mess up the market moving forward.

Everything is tied together from a phase of liquidity. Right now we're seeing basically a K-shaped economy here in Florida. We're seeing the luxury stuff, two, three, four, five million dollars in sales. If it's in mint condition and great area, it's going to be purchased immediately.

The wealthy do not care about the pricing of this stuff. They want what they want. If it's a unique product, they're not going to see it pop up for some time. They're just going to go ahead and purchase it.

So the K-shaped economy is playing out. The bottom 90% is basically struggling on their monthly payments. There's two income households. They're trying to make things work and honestly in a lot of circumstances it makes way more sense to rent.

And so if you were thinking about buying, do the math of what it would cost to rent that same exact house and make the decision for yourselves. In some cases you might have that emotional response, hey, I just want to own a home. I have a friend who, you know, they're getting married. The wife wants to buy a house because they want to settle down somewhere, but they're paying an extra $2,000 a month to be able to do that when they could rent that same exact house, keep that extra $24,000 per year and invest in the stock market or somewhere else, not have to worry about maintenance, etc.

And not have to pay the closing costs and they could have a lease option in there saying, hey, I'll have the option to cancel this lease. They decided, you know what, we're just going to go ahead and buy. We're going to go take these builder incentives, rate buy downs, all this other stuff. And look, it's a personal decision for everybody.

However, when you look at it mathematically in many many cases it makes more sense to rent than to buy and that's what's going to cause prices to even continue going down more as more buyers sit on the sidelines renting, negotiating down rents cuz rents are actually falling at this point in time and that's what ultimately sellers have to figure out is they have opportunity costs. The buyers are in control and they have opportunity cost. And look at this, this is why it's so unaffordable. The income needed to buy a typical home has increased 79% in just six years.

Wages didn't go up 79%. Productivity didn't go up 79%. I've seen estimates where it's gone Wages have gone up 25 to 35% during this time period. So the American dream just got a lot more expensive, right?

Buying a house, even going to college, these things that are the American dream, basically Americans are getting priced out of the American dream and it's a huge issue. So this is the household income needed to afford a the finance purchase of a typical home valued You can see it went from 52,000 all the way up to 93,000. This kind of decline here is because we saw mortgage interest rates decline and that impacted the payment. So this is something that you really want to think about.

And this is where the annual household income required to spend is less than 30% of the monthly income. And the rule of 28 says that 28% of your income should be your shelter costs or less, okay? So actually I think 30% is quite generous. And here's what we're seeing, right?

We saw the oil spike above 100. There's one point where it went up to 120 after hours and this made the 30-year fixed mortgage rates just pop off the bottom here right when it hit six. We're celebrating and say, okay, demand's going to come back because the payments are going to be coming a little bit more affordable and then we went just the wrong direction. That is why the administration is working as fast as humanly possible to resolve this issue in Iran.

Of course we don't know the real reason why we're there. There's like six different reasons that have been proposed by different people in the administration of why we're actually there. Who knows if we'll ever find out, but the issue is that the strait is closed. About 20% of the oil goes through the strait and so they need to reopen that as fast as possible cuz once those pipelines shut down it can take up to 30 days to reopen those pipelines and so it could cause a real delay and this is why we're starting to see a spike at the pump and in interest rates cuz oil is a component for basically everything and it can pump inflation and CPI up a lot which will make it a lot take a lot more for the Fed to start reducing rates through rate cuts, which I know everybody was expecting this year.

Now there's only an expectation of one rate cut because of this oil spike and how that'll play out in CPI. Secondly, the job market's buy a house. So it's not good for housing in general if the employment market's bad and then of course the GDP numbers came in a lot lower than expected to. But a lot of sellers when they can't when they list their house, they get frustrated.

They can't sell it. They become what's called an accidental landlord. They say, I can't sell it. I want to rent it.

Let's do the math and figure out if we can rent it. Well, they do the math and they they find out that they're underwater basically $800, $1,500 per month already and they have to basically decide, okay, am I going to take the loss of equity and sell my house or am I just going to do a slow loss and have a rental property in a market where a lot of other sellers are doing the same thing. So you can see in this chart, it comes from ResiClub from Lance Lambert created with Datawrapper. You can see these blue spots are where you're seeing a lot of rental listings that were previously listed for sale for at least two weeks, failed to sell and then were relisted as rentals within three months according to Zillow analysis.

And you can see areas like Atlanta, Jacksonville, Miami, these areas in in Florida and Texas and Georgia, we are seeing this across the board. There's tons of sellers who are just ripping their house off the market and putting it up as rental. Well, all of this rental demand is happening at the same time as net migration from the north and the west are down 93% from the peak. So we don't have these relocations coming and now we have a super supply of rentals coming on the market and we're seeing rental prices drop.

So the sellers are getting super frustrated. They're trying to figure out how they're going to navigate this market. You need a top agent to be able to do the math on this and help you figure out what's the best decision for you now. Do you rip off the band-aid now or do a slow bleed?

If you need help finding a top real estate agent, just email me. It's john@movewithmomentum.com. It's j o n and I will go ahead and it's this all my information is listed in my description. If you need any help on doing the math, whatever, I do this stuff complimentary.

I I'd love to help people in their situations. I love hearing from you on what's going on in your market and what kind of things you're working on and so definitely feel free to reach out if you need a top agent or you need to help doing an analysis. I love providing free resources or or to be a resource for people. Um but here's the truth.

There's certain areas in every correction where they get hit first. Florida and Texas are definitely first and you can see that every major Florida metro area experienced declining home values in January 2025 to January 2026. So there's nowhere to hide now, right? It's kind of spreading across.

It's like a virus spreading across the country, spreading across Florida. There's certain areas that are overbuilt. This is because Florida and Texas, the builders went crazy. They expected this immigration and net domestic migration to just continue and it just hasn't.

It's fallen back. It's mean reverted and now it is actually people moving out of Florida, going back to where they came from or moving to the Midwest trying to find places that are affordable because Florida is no longer affordable in a lot of cases versus the wages that are paid here and so that's a really big impact for the people who are relocating here, young people looking to start their life. And the other issue is that Florida has a lot a massive aging population where sadly folks are passing away and their houses are coming up. So we're starting to see short sales pop up every single day.

We get two to three calls on short sales, underwater, my house isn't selling, etc. You know, I manage and and work with 280 plus real estate agents across the state of Florida and Georgia. These are top agents. We do 600 million dollars in transactions per year and so we see a lot of this stuff.

So when I'm reporting this, I'm reporting it from experience. This isn't some ivory tower. I work with some of the top operators, top property managers, top lenders, top real estate broker owners, top real estate agents across the state and I'm just reporting what I'm seeing, what I'm hearing along and then looking at the data and may making sense of it, right? Because there really at this point isn't any conflicting data.

A lot of people 6 months ago would argue and say, "No, no, no, I don't see it." Today, it's undeniable and they just literally just did not see it and now they absolutely see it. So look, there's no judgment on that. That's why we started this channel make people aware of what's actually going on versus trusting the mainstream media who's still pushing this narrative of a housing shortage, which is complete BS when you look at how much new construction is just piling up across the state and all these people who are who are looking to sell in the demographics. Uh but this is causing ultimately seller urgency to increase.

You can see Tampa is the number one area with the motivated seller index score at the highest level. 59% are very motivated. You can see Dallas is getting crushed, Denver, Phoenix, Houston, Miami. So these areas that saw this massive run-up from 2020 to 2022 are now the areas that are falling the fastest and there's also areas in the northeast and the northwest that are also starting to see the pain because the affordability crisis is absolutely real.

The wages did not keep up with asset values. The rates going from 3% now above 6% is a big problem that decreases purchasing power by about 30%. At one point we had 30 to 50% when rates were even higher than they are right now and so we expect that that seller urgency will continue moving forward and I do think if you're a seller, you need to do the analysis on whether you want to rip off the band-aid now and get your property sold. If you're a seller who has a perfect mint condition house and you price it correctly, it will sell immediately.

But the problem is the sellers are not pricing it correctly. They think their house is worth way more than the market will bear and they just refuse to sell it and erase some of their equity. My argument to the sellers is the one who owned it for a long time is you already had a 60% increase in a few years. Wiping out 20% of that equity gain to get your property sold near the peak price, I think is is absolutely worth it.

Otherwise, it's going to evaporate anyway. Real estate is priced at the margin. So if you start seeing short sales in your community, start seeing foreclosures in your community, you start seeing more new construction that's slashing their prices, those are going to be the comps for your house regardless. The agent doesn't control the market.

The seller doesn't control the market. The market decides. The buyer, the next marginal buyer, the next marginal seller are the ones who determine the marketplace. So you need to listen to the market and adjust to it quickly.

Of course, we're already grinding along the bottom here for a few years for the lowest number of sales since 2009 and this is again freaking people out. They list their house, they're not getting many showings or they're getting a ton of showings but they're getting no offers. It's again, it's affordability crisis. We are down for the number of units sold 33% from the peak.

Uh but I know a lot of people say, "Oh well, 2008, 2009 could never happen again." Well, there's a lot of metrics out there already from the demand side showing that we're already at that point and in some case worse. This is a crash that's already happening without some sort of macro event causing it. This is simply because of affordability. So my question to you is when there is a macro event that occurs like this oil spike or something else that happens or the credit cracks.

We're seeing a lot of private credit issues and all that comes tumbling down and you see the stock market drop, this will impact it even more than what you see on this chart just from the affordability standpoint. And that's why in a lot of cases this setup is actually worse than 2000 8, 2009 is because we're already starting to see the slow down in the number of transactions, which is phase one, right? Transaction slow down. I'll go over the phases of real estate moving forward.

So listen, keep listening to this video to see what those are. But right now because we're seeing transaction slow down, we're seeing a little bit more inventory come back on the market. So we have inventory up, right? That red line right there, up 7.9% year-over-year February 2026 versus 2025.

And demand is like at record lows. So we're seeing that divide kind of happen at the same time and inventory keeps stacking every single month and over time as real estate's an illiquid asset, prices will come down and it's just a question of how much and where. And properties right now are already going underwater. You can see a lot of these areas in Florida and Texas are already underwater from when they purchased the property.

This is the share of outstanding homeowner mortgages with what we call negative equity, the price that they purchased the house. Net equity means a homeowner owes more on the mortgage than their current market value of their home, okay? And you can see Florida, Florida, Texas, Texas, Jacksonville, Florida, where I'm at and it's increasing across the board because prices are coming down in these marketplaces, which is great. This is exactly what we want to see for the next generation of home buyers to have an opportunity to buy in at a decent price.

But for those who bought from 2022 to 2025, it's really tough for those people because now they're underwater just one step away from distress if they lose their job, if they bought with high amount of leverage like an FHA or VA loan. That's where we're seeing the distress in the new construction communities. So the other day, I had a great opportunity to meet a mentor and friend of mine, Melody Wright, right here. It's my wife, Britney and we got to sit down for a 3-hour conversation.

I asked her, "Is this something that's only Florida and Texas specific?" And she says, "No." She's been traveling the country reporting on areas in the Midwest all the way up to the northeast and she says that they're they are building in these areas. You know, New York is she said New York is a special place but the northeast other than New York, she said that they are building in these areas. Young people are moving out and the jobs just aren't there like they used to be. So she is not optimistic on what is happening in in the northeast and I look, Melody is fantastic.

She has the data. I've seen it. She's shown me the spreadsheets. She's shown me the tracking.

She has a great Substack and some of my top real estate investors told me about Melody just a couple months ago and said, "Hey, you need to follow this person. She knows what's going on. She's going on these road trips. She's going on the ground.

She's talking to people in all of these areas. Follow her Substack. She's a phenomenal resource." And it was just a privilege to to meet somebody that I, you know, messaged through X and met. Now this is my third person I've met through X that I talk with on a weekly basis.

So if you haven't followed me on X, I'm @jonbrooks, j o n brooks and I'd love to connect with you and and hear your story, what you're working on, what projects you're working on. If you're a home buyer or seller, if you need help, if you're a real estate agent, that's why I created the channel. I wanted to meet some some awesome people and that's what it's been able to do so far. So I appreciate that.

So let's dig into what's the steps we're at. So I'm posting on X. There's some tweets out there that just go viral and I want to explain what these tweets actually mean and give a little bit more context to them because I don't I don't share the full context to them. So the housing market doesn't crash overnight.

It's an illiquid asset, okay? So what happens first is transaction slow, which basically means the buyers disappear. That's what we're seeing right now. And then listings sit longer, okay?

So we went from like 20 days on market now market now we're up to almost 90 days on market for for a house and then listings sit longer. That's that's where we're about right now and then the builders price cut do cut prices. We're seeing that. So now we're between phases two, step two and step three.

And then the owners get trapped. This is where we're headed into, step four. This is what we're starting to see the distress of the short sales and foreclosures. But again, this takes years to play out.

It took just from the buyers disappearing to listings sitting longer, it took 3 years just to go from one phase to the next. Can take another 3 years to go to the next phase. So I want to let people understand, there's no magical crash that's going to happen overnight, okay? And that's why I said the market doesn't crash overnight.

It takes time. And then the owners get trapped and the short sales rise. And while short sales are rising, it's not widespread. I'm just getting a few calls per day.

It's not every single house that is getting a short sale on it. So I believe we're somewhere between step two and step three. We're early in the cycle of the part of the correction which is completely natural to have mean reversion. And so I just wanted to explain this chart for you.

You can you can follow me again here at John Brooks. Um send me a DM. I'd love to connect with you guys. And look, this was another one that people had a lot of angry comments about which nobody wants a 3,500 foot boomer house.

Gen Z doesn't want it. Millennials can't afford it. Foreign buyers are gone. These homes are becoming stranded assets and there's thousands of them sitting sitting on the market right now.

This is 100% true. Well, people got offended by the boomer house comment, but the reality is these are older folks who live in a house they bought them 20 30 years ago and they haven't made any upgrades to the house. They need new 100 200,000 dollars of upgrades to get them up to snuff. They don't want to make the upgrades and the the younger generations aren't having as many kids.

They don't need 3,500 square feet. They can't afford like in my community we have 3,500 square foot houses, but you're going to have to pay 1.2 million dollars for it. Your mortgage payment's going to be above 10,000 dollars in a lot of cases depending on how much your down payment is. And then you have your association fees, etc.

Gen Z doesn't want it. It's too big. It's in areas they don't want. They don't have the kids.

Millennials can't afford it. So even if they have the kids, there's no way they can afford 120,000 dollars a year in mortgage payment. And the foreign buyers are gone. The Canadians aren't buying anymore.

We're not seeing the Brazilian buyers. I'm not seeing the Chinese buyers. I have not seen them personally. I think the international migration the number came out for Florida is down 70%.

So again, I'm explaining this tweet because I think people got confused on this. Um and I'm not talking about new construction because uh when I say it's a boomer house, it's somebody who already owns a house. There's 3,500 square foot houses that are new construction that are selling to families that are relocating from New York, from California, etc. To our area and they're buying this in new construction and they're getting the rate buy downs and etc.

But they're buying in areas where there's really not a lot of jobs. There's not a lot around it. They're very packed. There's a lot of congestion.

And so look, that's a question that you have to ask yourself if that's the area that you want to go buy in, but they are becoming stranded assets. We're seeing them sit on the market longer. They need these upgrades. So you have to ask yourself who is the next buyer who's going to buy this 3,500 square foot house in Florida from these people who currently own them.

That is the point that I'm trying to make across and so love to hear from you. Who do you think that buyer is? Who is the buyer that can afford either to buy it cash or pay a 10,000 dollar a month you know, to be able to buy these houses that are just stacking up here in Florida and why would they pay full price for these things in today's market rates. Love to hear from you.

So look, I'll be again here on Friday at noon doing a live. You can subscribe and you can get notification when I go live which would be great. Love to have you join us. Ask live questions.

I answer every questions. If you email me, I answer every question there. Will oil prices in the stock market break the housing market? Let me know if you think that's true.

Comment below and what happens if oil prices stay elevated for longer. So I know prices just came down about 5% not even nearly enough coming down to be able to to help the market. We really need to see oil you know drop below 70 another you know 20 30% lower than what we're seeing right now. And then I'd love to hear from you.

What are you seeing on the ground in your market? As always you can follow me on Substack. I talk about things I can't talk about here on YouTube. Um and you can get notifications if you're a real estate agent I have great free resources there.

I can send you what the schedule that I had when I started selling real estate. Sold 66 properties in my first year in 2020 in 2016 as the number one agent in my marketplace. So if you need my schedule on how I did it, why I did it that way, exactly what to do to succeed. It's the same thing I was doing then that you can do today to make multiple hundreds of thousands of dollars in your first year selling real estate if you follow the schedule and you do the routine.

Reach out to me. It's a free resource that I provide to folks. Love to hear from you and I'll see you on Friday. Thanks so much everybody.