It's WORSE Than the 2008 Housing Crisis. The Data Says So

It's obvious to me, but may not be obvious to the media or other people who aren't paying attention, but it is worse than 2008 from a housing perspective, especially in Florida and Texas, and it's just a matter of time before it impacts your state, too. Comment below where you're at. We're going to dig into some awesome data today that's going to give you everything you need to know about the housing situation here in the United States and in specific areas of the country that's going to make a big difference for you and your family. So, let's jump in.

Now, everybody says it's not it's way different than it was before. Yes, it is way different in the fact that it's worse than the 2003 to 2008 runup. So, here's two charts of the median sale price of houses sold in the United States. This one's from 2003 to 2008.

This other one's from 2020 to 2025. Obviously, they kind of rhyme with each other. They're not perfect, but people keep saying it's really different. Everything is completely different.

The setup's not the same. Well, let's dig into the actual numbers. Here we go. Here's the comparison of why it's worse.

The US housing and economic comparison. So, let's look at June 2006. The median home sales price was $246,000. Today, it's $416,000, which is wild.

The 30-year fixed mortgage rates are pretty similar, actually, between these two periods. Home ownership rate is, you know, it's gone down just quite a little bit. Maybe that extra 3% picked up was the institutional investors. Housing inventory month supply, it was 6.8 months, so it took longer.

But right now, we're seeing rapid amount of inventory coming onto the market and we're still at 4.4 month supply. Here locally in Jacksonville, we're pushing six, seven, eight month supply. I mean, it gets worse every single day. Foreclosure rate 1% in 2006 versus 49% of loans.

Well, why is this? They haven't been foreclosing on loans for the last few years because of FHA, VA, you know, loan loss mitigation programs. Even for conventional loans, they're not foreclosing on them. And that will start coming through at uh the next end of the year, next few months here.

So then positive equity position. This is what gets me. A lot of people say, "Well, there's so much equity in these homes, right?" Well, equity can quickly evaporate in a lot of situations. So 90 to 95% of mortgage holders in June 2006 had a positive equity position.

98% of mortgage holders in June 2025, so very similar mortgage loan delinquency. We just talked about the delinquency. They've actually it's gotten so bad on the FHA side that they stopped reporting the data back in February. Unemployment rate 4.6% in June.

We're starting to see unemployment creep up here in June 2025. Bankruptcy filings are low um today versus that time period, but we're starting to see more bankruptcy filings come through. And a percentage of homes own free and clear, 32% versus 38%. That's great and I'm wonderful to see it.

That doesn't mean they won't see distress out there. Five-year equity runup before each peak. The median price growth was 38% 179 to 246 and now it's 317 to 416 which is 32%. So we obviously saw a massive run up and then the home price to income growth.

So this is you know 3.2 to 4.7 and 4.0 to 5.6. The gain in equity drivers really important right we had easy credit back in the day and speculations. There's the stories of, you know, the strippers being able to buy three or four houses, the ninja loans, the no income, no job type of loans just to get those collection of the fees from mortgage brokers and real estate agents. It's ridiculous.

Equity gain drivers this time was that there was massive stimulus, zero interest rate policy for a couple of years, cheap, cheap debt that people could buy and then speculation 2.0. I cannot tell you how many people are speculating on this real estate market either between the Airbnbs or the single family rentals where people, you know, were going out buying four, five, six, seven, eight homes, turning them into rentals, getting a little bit of cash flow. The ones who are holding them now are absolutely regretting that they didn't sell last year and they're basically holding an asset that has increased costs on the rentals, right? Insurance, taxes, all of that, repair costs, and they're stuck in these properties because it's an illquid thing, and it's it's expensive to sell real estate, right?

It costs 6 to 8% once you look at all the closing costs and the real estate agent fees. So, the equity gain drivers are pretty much similar. The loan quality is different, right? You had stated income before now, but now you have stated occupancy issues where people saying they're occupying them, but they're actually not, and they're using them as an an investment property.

And there's studies out there that say 33% of loans out there right now that were originated the past few years were stated occupancy issues where they were basically defrauding the bank saying that they were living in it when they really weren't on the time of closing. So here's I mean here's the thing like you it does not look that different from 2006 and it's much worse than it actually is back then on in in various forms and fashions especially the affordability crisis. So let's look at the main factor. This is number one factor that is makes it completely different.

Debt is up for the consumer by 28%. Right? So 2008 peak was 13.8 trillion. 2025 Q1 was 17.7 trillion.

This comes from the New York Fed household debt and credit report. The debt type mortgages obviously has 27% increase in the in the amount of debt that they have there. Credit cards is significant. Obviously we see the buy now pay later stuff.

Even Costco is starting to do it. It's pretty sad. The consumer is so strapped for cash. Student loan delinquencies, all of that are playing into it.

Auto loans up 100%. Wow. Um, student loans up 167%. So, you know, consumers are just getting hurt.

That's why the median age of the home buyer today is 38 years old. And usually they're getting money from their parents or an inheritance to be able to purchase. But it's frankly worse, guys. This is way worse than it was in 2008 from a debt perspective.

And obviously debt is going to impact how much somebody can afford a home. Who can actually buy a home? You ask yourself that question in today's market, right? I bought my house back in 2020 and got a 2.75% rate.

My payment is $3,200 and I live in a beautiful country club community. That same house is $200,000 higher and the rate is around 7%. Your payment's like 10 $11,000. Who can People don't make that type of money in my city in Jacksonville, Florida.

There's very few. You'd have to make three $400,000 to be able to afford a house in my neighborhood. Now, those jobs don't exist here. There's very, very few.

So, you wonder who is the actual buyer. They have to come from out of state. Well, if they're not relocating and the people locally have too much debt, there's there's no buyer for it. So, that person's going to be stuck in that house or they're going to have to have a massive price drop on the property by 30 40%.

And I know those numbers sound terrifying, but that's where we're seeing things heading right now at this current moment. So, let's jump in because I think it's really important to look at the builders. The builders are a leading indicator. Builders uh put out a ton of data of what's going on with them.

So, this is KB Home. They reported yesterday and their share prices are down 20% from the beginning of the year. Here you can see their price chart, but they did actually quite well on earnings because they're diversified from around the country and not every part of the country is doing that bad. It'll eventually spread everywhere as the news gets out.

But their major concerns are this. This is what they said. Consumer affordability, high mortgage rates, low lower spring demand are the massive issues and KB homes trimmed their fullear guidance due to lighter demand during the spring season. The positives that they said were going on were basically the build time is back to pre2020 numbers.

So, they're building properties in 120 days. It's no longer taking them about a year. And maintaining transparency and pricing to buyers. So, when a buyer comes through, they're just telling them straight up, hey, here's the price.

Here's what the fees are going to be. Like, they're not doing any tricks or anything like that. They are giving massive incentives to the consumer. And so here's the new price decline from LAR.

This is what they reported the other week. So they reported their new home prices declining 24.4% from the peak, which is absolutely wild. And we expect that those declines will come in, you know, even more into the future as more inventory hits the market. And here's the other part of it.

Not only are prices coming down, but they have to give sales incentives, right? So, this is, hey, we'll buy down your interest rate by two points, two percentage points. We will pay for your closing cost, things like that to to be able to help them out. And here's the map of pain.

So, this is the housing market weakness triggers Lenard to offer their biggest incentives since 2009. So, we're already there. I mean, this is the thing. Like, some people can't even believe that we're even having this conversation, especially people in the northeastern areas that didn't have this spike.

But people who are in the cities with that spike in 2020 to 2023, they are just they have to come down. Those prices have to come down. And so new homes are skyrocketing for sale. This is for the whole United States.

So we're at November 2005 levels already. My point is this. We are haven't even seen any pain really in the housing market up until this point. Yes, the stocks are done because the projections are moving forward.

We're not going to see pain until these foreclosures process through. And so we're going to be seeing skyrocketing inventory from now for a long period of time until prices come down. And this is just for the US. Now, new homes in the south for sale are above the 2008 numbers.

It's already worse and we haven't felt the pain yet. This is why we're saying it's going to be worse than 2008. Now, Florida specifically, this is not compared to 2008, but just prior to, you know, the inflation that came through in 2020, 2022. We are now have skyrocketing inventory every single year.

It's starting to spike. We expect it to continue to move up as builders finish their pipelines. There's entire communities that are basically sitting vacant at this time. It's the same problem with multif family.

They overbuilt multif family. Florida still got a lot of land to develop and builders went wild and they thought that relocations would continue for a long period of time so that way they could continue to build but you know relocations are down 80% from the peak and that's the big issue. Here's the price change by metro. Obviously you can see all areas of the country are doing completely different from each other.

This is one year change in metro level home prices between May 2024 and May 2025. You can see obviously Florida and Texas and the South in general is really struggling and the North is doing just fine. They're actually seeing a little bit of price increases. This is why you don't see on the news, hey, we're in a crisis here because not every state right now is in a crisis yet.

It's mostly Texas and in Florida. And for a crash to happen, that's a 30% decline in a lot of areas around Florida. We're already down 10 to 15 to 20% depending on where it is and if they're competing with new construction. This is really bad.

So existing home sales are as weak today as they are in 2008 and it's hasn't even got started yet. Here you can see the data that came out in 2005. This is May 2005. This is how many monthly existing home sales occurred during that month.

So you can see in 2008 it was 403. Right now it's 389. So it's worse than that time period. And we expect it to continue to get worse going into the end of the year.

Once we see seasonality hit, we're going to see a massive slowdown. We're telling realtors everywhere, save your cash. Get as many of your sellers sold before August, before school starts, because it's going to be a bloodbath come the end of the year with tons of inventory coming in, demand dropping, and rates are not coming down. Even though you see the 10-year Treasury come down, interest rates are not coming down.

So, let's talk about that. Existing home sales are down 40% from the peak. And as you can see, we are at the '08 numbers here. So, just another good way to look at it.

So existing home sales are just as bad as we were during the '08 crisis. One of the things that spread the basically the affordability crisis was these institutional investors came in and purchased so many homes from 2012 all the way up till 2022. 36% of those institutional buyers own homes in these six markets, right? Charlotte, Atlanta, Tampa, Houston, Dallas, and Phoenix.

These are areas where they can build cookie cutter stuff in the south where people are relocating to. They saw the population growth. Now, in Jacksonville was one of those cities as well. You can see here on the map, the reality is that the institutional buyers stopped buying in 2020 once they saw the interest rates increase.

They could no get longer get cheap financing for the properties, make the numbers make sense on paper. And we think if rates continue to move up, obviously that's going to completely slow the market. And I don't see a situation where interest rates would come down because the demand for mortgage back securities is simply not there. And we're we can look into to that data as well.

And the biggest issue, we referenced this in the beginning of the video of why it's worse is that the poor just keep getting poor. Their middle class is falling apart. The bottom 50% of Americans share 3% of the wealth. These wealth numbers are just mind-boggling.

Or do you guys see it too? Comment below like like all the money is going to the top. And this is why trickle down economics, you know, it works a little but not enough. It doesn't make it to the people who need it at the bottom.

So there's 166 million Americans that, you know, share this percentage of the wealth. I also saw that the average 50-year-old's net worth is like $56,000. So there's no way there's no path for them at this point in their career and life to save enough money to be able to retire. They're going to have to work the rest of their life.

And this is a problem. And obviously if you can't make the housing payments, which you know 20 to 30% of the money that's coming in goes straight to the housing payment. If housing payments don't come down, then they're really not going to be able to build wealth. It's now frankly cheaper to rent right now.

So I have friends coming to me, John, I want to buy this house. I want to buy this house. I tell them, wait until the end of the year. You really need to negotiate.

You need a top agent in your marketplace to be able to help you be strategic because if you buy at the wrong time, you could be stuck with that thing for a long period of time. No one wants to lose money. I mean, you could lose be losing one to two years worth of salaries. And I'm talking people out of buying right now and and to wait and to to be careful.

Now, if you need somebody to help you in your market, let reach out to me. You can look at my email and the notes, make a comment, and I'll reach out to you. I can connect you with others. I've done that many times already since starting this YouTube channel.

So, I appreciate you guys reaching out. Happy to help. But buying a home in 2025 costs 43% more than renting one. And rents are now coming down, which is wild.

So, the premium for home ownership has been elevated for three years straight and now it's looking to to change. Hopefully, that comes down pretty soon. And a lot of builders, what they're doing is they're selling their inventory just to have them turned over as rentals because they have to find some way to get cash flow off of the property because they a lot of them have debt backing it. Their taxes obviously is starting to depreciate.

They need to be taken care of. They're not taking care of the lawns and things like that. But it is frankly for consumers it's cheaper to rent now than to buy. This is the federal funds effective rate.

So everybody in the world thought they were so smart and so successful by buying real estate and holding it for a long period of time. What actually happened was that interest rates came down for a 40-year period. And now they're reverting back to the mean which is frankly even higher than it is today probably eight or nine%. And they're saying, "What the Fed, what is the Fed doing?

They're going to collapse the economy. They're raising interest rates." We've been lowering interest rates from all the way up to like 18%, you know, all the way down to zero. And we've had that period, look at this, like to zero. Zero interest rate policy.

Obviously, that's going to inflate every single asset that is purchased. So, everybody looks like they're geniuses, but the reality is the Fed just bailed out everybody who owns assets during tough periods of time. And we'll probably continue to see this cycle continue as the dollar basically becomes worth nothing. I read somewhere that the dollar is worth 24% less since 2020 already.

And that those numbers are quite staggering. And everyone thought they were geniuses. This is the interest rates coming down. Right?

Here's the 30-year fixed mortgage rate 1971 to present. And you can see just rates dropping, dropping, dropping, dropping, dropping. And then obviously rates coming up and prices start coming down. Everything in real estate is a function of payment.

So if if the payment goes up, then it makes it not like it just lowers your buyer pool. And if there's more inventory because the builders are building, then you have a you have a double whammy in that situation. Frankly, 60% of people are unable to afford a house under three over $300,000, which is crazy to me. So this is the median price home in 2025 is 459,826.

So that's a lot of people being unable to purchase. So we don't have a inventory problem. We have an affordability problem and we're not building inventory under $300,000 in a lot of cases or in areas that have a median income that's going to be able to support $300,000. Here's the payment.

This chart is mind-boggling. Back in the day it was, you know, 1,500. Back in 2020, it was $1,500 for your housing payment for a median price home. And now it's 2,800.

So $1,300 spread in just 5 years. For a lot of people, that's almost double, right? You know, I was looking at one of the apartments that I rented, you know, even a decade ago, and it's it's up 80 90%. I don't know how people graduating from college will be able to rent even.

It's kind of terrifying. And the pay is not keeping up with productivity. So we're seeing a ton of productivity gains for employees, but the hourly pay is only up 32%. So people are more productive.

A lot of people are working longer after hours due to technology, but the hourly pay has been lagging. So productivity has grown 2.7 as much as compensation for workers. So basically the way you can think about it is one-third of the gains go to the worker and 2/3 of the gains go to the business. And so that's just how it is.

And unfortunately that's going to impact housing if people aren't paid as much. Home price to median income ratio. This is why it's worse. It's all the way past the housing bubble when you look at it from a household income ratio perspective.

So guys, things are already worse and it's getting worse every single week that we're tracking this data. And the educated unemployment is going up. Obviously, employment is going to be a big factor for first-time home buyers. For these uh educated folks here, ages 20 to 24, 25 to 34, and 35 to 44.

The unemployment is starting to move up a little bit after this spike during those years. Now, jobless claims are also moving up. So this is from 2022, right? We had it we had it come down a lot and now it's starting to move up very quickly.

So this is the highest since November 2021, the US continued jobless claims four-week moving average. We expect there to be more job loss coming through. Powell came out today and said that he is not have any plan to reduce the rates. Basically, you know, he does not see this impacting housing supply in the future and things need to revert back to normal.

So, at least until May of next year, as long as Pal's in charge, it's likely that he's not going to do any favors for housing. And then, frankly, even if the Fed funds rate is reduced, that does not mean that the there's going to be more demand for mortgage back securities and that mortgage rates will come down. The Fed is not going out there right now and buying a massive amount of mortgage back securities to help the housing market. They're letting it collapse as shelter is the one number one factor in component for, you know, inflation.

So the job issues continue to get worse. So it's deteriorating. Permanent job losers reached 1.92 million in May, the highest in four years. The number of people receiving unemployment benefits was the most in four years and both have been consistently rising over the last three years.

The other thing that's getting which is interesting is the banks are tightening lendered stand lending standards. This comes from Braavos Research. Uh banks are tightening lending standards on the rise again. And tighter credit conditions would be a big headwind for the economy and the stock market and really for for real estate as well.

And demand is waning for the MBS. As I noted, mortgage rates rose 1% in the last time the Fed delivered a series of rate cuts. So, we are no longer correlating with the Fed funds rate. Right?

People don't want to put their money back in housing when we have all these headwinds in the way, but they're fine with reducing the Fed funds rate, which is basically the overnight borrowing rate for the banks. And where there's speculation, now there's pain. So, this is the one-year change in home prices at America's largest 50 metros between May 2024 and May 2025. The highest concentration of institutional investors, right?

Tampa, Dallas, Phoenix, Atlanta, Houston, Charlotte, just like we saw in that chart. Here's Jacksonville. These are the areas that will likely get hit the hardest. And this I think this chart basically summarizes it all where the areas where there was massive speculation of house prices are now starting to fall.

The areas that did not have that massive spike in appreciation, they're just getting the regular 4% 3% trend line and people are still able to purchase because the prices did not go up that much. So it was a speculative bubble caused again by the Fed's policies of zero interest rates and closed sales. You know, it's worse than it was in 2008. Just to kind of compare to 2019 before the 2020 period, basically, you know, in Jacksonville, we're down 22.8% in the number of closed sales versus 2019.

2019, I thought there was going to be a recession and I think we were headed into one. And then, you know, it just totally spiked with what interest rates did. Again, housing is a function of payment. And part of that, the biggest part of that is really what's your interest rate?

Where are m Americans moving from in 2024? This is pretty interesting. And I see that people are still moving to Texas and Florida, even South Carolina. Look at that.

And people are leaving the north in the west to go to these lowerc cost areas. But the reality is in 2025, we're starting to see this really slow down. The number of relocations are drastic. We see the number.

We can tell this by the amount of people who click on Zillow. Leads are down like 50% from the years prior because what do you do if you're out of town? You got to click on Zillow. You don't know a local realtor.

And so, you're going to go find somebody on that website or some of the other websites. The leads are down very, very drastically and Zillow is hurting from that. So, with that, look, what we want to do is we want to have a long-term focus. You know, down markets where the foundation is set during the next upturn.

Partner with the best people out there in the marketplace. Grit is the key. Get the information that you need. Comment below.

What do you guys see happening in your market? Do you expect this to be worse than '08? I certainly do. In a lot of ways, this is already worse than 2008.

Comment below. Is it worse than 2008 in your market? I think it's going to be different for each one of us, but I can tell you in Florida, it is going to be an absolute blood bath. I can absolutely see prices coming down 30 to 40% from here.

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See you guys later.