Thoughtful Money with Adam Taggart Big Drop In Home Prices Coming Next Year | Melody Wright
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Nov 19, 2024 
Melody Wright, a mortgage expert and housing analyst, shares her insights on the chaotic U.S. housing market. She discusses how recent Fed rate cuts have paradoxically driven mortgage rates up, contributing to a frozen market. With rising inventory and declining prices, some seasoned investors are breaking their 'never sell' rule. Wright also warns of potential struggles for new mortgage lenders amid current instability, and offers predictions for home prices, highlighting that 2025 might be a significant turning point.
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Broken Housing Market
- The U.S. housing market is severely broken, with sales at their lowest since 1999.
- This is masked by a narrative of normalcy, but rising inventory and motivated sellers suggest a coming correction.
Shift to Distress
- Motivated sellers, driven by rising costs and stagnant market conditions, are becoming distressed sellers.
- This shift, coupled with expiring rate buy-downs, signals a potential market crash by spring 2025.
Unprepared Lenders
- Many mortgage lenders, especially newer ones, are unprepared for the coming wave of defaults, mirroring the 2008 crisis.
- Rocket Mortgage's $483 million Q3 loss exemplifies this lack of preparedness.