Morning Wire Weirdest Housing Bubble Ever: Will Your State Crash? | 3.9.25
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Mar 9, 2025 John Rubino, a financial analyst and author, shares his insights on the current housing market. He discusses the recent drop in interest rates leading to more mortgage applications while warning of a looming crash in certain areas. Rubino highlights the unique challenges faced by younger homebuyers amid inflation and affordability issues. He delves into the downturn in Austin's once-thriving market, regional disparities, and the impact of corporate ownership on housing trends. Expect significant shifts in the market as baby boomers prepare to sell.
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Frozen Market
- The current housing market is unusual because high prices have frozen the market, leading to low transaction volumes.
- Despite all-time high prices, home buying and selling are at 1990s levels, even with a much larger population today.
Inflation's Impact
- Currency devaluation (inflation) has driven up house prices faster than wages, making homes unaffordable for many.
- This has benefited older generations who own assets while disadvantaging younger generations.
Potential Crash
- As more homes enter the market at unaffordable prices, sellers may panic and lower prices, potentially causing a crash.
- This is marked by increasing inventory, delistings, and price cuts.