 The mortgage collapse in the US housing market just got even worse in 2023 with mortgage purchase applications crashing by an unbelievable 41% year over year down to the lowest level in 28 years even lower than what occurred during the last crash after 2008 indicating that so let's just stop it right there for just a second um yeah absolutely mortgage applications went went down dramatically okay and this is nothing that we didn't see coming whatsoever and it's the worst that's been since 94 I believe is is the date that it goes back to and it's a little worse than the 2008 era which when you look at that just from the face surface it looks like oh my god this is so scary and everything else um but the here's one one thing to understand is that when mortgage rates came down just a little bit you know rates went up to seven and a quarter or so something like that and when rates pulled back even when rates pulled back to six and a half um we saw an uptick when rates got into the low sixes 6.1 6.2 we see we saw a surge we saw a massive surge and we just saw that in the pending sales data for NAR we saw 8% month over month from the December to January which is a massive number now now that of course was like Fannie Mae just had an article a head fake um that that's not sustainable that little this is not a housing recovery now let me be clear that I do believe that we're going to see prices continue to soften absolutely but are we going to see a crash worse than 2008 like Nick here is talking about absolutely not this is just my opinion but I do think that we're going to see a little more pain why because affordability is crazy it is that we're going to get into that in this video with rent versus buying and stuff like that um there is there there's going to be some adjustments made and the real question is how many buyers can continue to afford to buy houses at today's situation right now prices are going to soften interest rates are going to soften but are we going to run out is the barrel going to run dry buyers who can continue to buy now I've got I posted on Instagram today now this is very interesting because I wanted to I wanted to gauge the market because I have boots on the ground I think this is something that Nick here does not have he's looking at just plain data um and spreadsheets and that's great and you can analyze a lot of things however boots on the ground added with data gives you an entirely different perspective on top of the fact that if you've actually been in the business for the last 20 years but I did a post on Instagram and I said hey guys with interest rates being as high as they are right now you know we bottomed out at 5.99 and we got up as high as uh 6.87 a couple days ago now we're at 6.77 today I said hey guys even with the mortgage rates being higher are you still seeing multiple offers in your markets because you know month ago 30 days ago we were seeing multiple offers all over the place and I wanted to gauge if we were still seeing that and you guys can go and I'll screen share that Instagram post at the end of this video and read some of those comments to you but it was overwhelming the amount of agents all over the country that are getting multiple offers losing out to other offers going for more than list price now this is not 2021 of course it's not 2021 and there were agents in there that said no I'm not seeing multiple offers in certain areas New Orleans was one of them an agent said there's an agent down in Fort Lauderdale that said he wasn't seeing multiple offers but then there's other agents in Fort Lauderdale that said they are so not only is it local but it's also per agent in your business and how you actually operate I guess there was a lady that said that she wasn't seeing multiple offers in tampon and the next agent said that he had 20 offers on a listing within a week so I think it just kind of depends so it's kind of sporadic but these agents were all over the country and what does that tell us it tells us that demand is still extremely strong even though we've lost a good 30 40 percent demand is still massively strong and like I say well we run out of buyers who can afford in this environment that's a question right there however we've got millennials coming into their prime buying years and they're just coming in by the truckloads in their prime buying years and going to for years and years to come so it's just going to be interesting how all this kind of plays out let's continue the to watch here the spring 2023 housing market is going to be an absolute ghost now we're going to have empty open houses we're going to have desperate sellers feverishly trying to cut the price and we know this because according to the now right there you know we're going to have desperate sellers we're going to have empty open houses and stuff you know that is that's pretty out there for somebody to come on YouTube and say that because right now as it stands there's high demand at open houses there's multiple offers on properties we're still seeing properties go for more than than asking price and this is happening in some of the markets that he actually mentions in this video so no that's kind of it's kind of like I mean this is this is definitely some clickbait he gets a lot of views he has a lot of subscribers because he he plays those negative fears and everything and he kind of uses the data to back up what he's saying but he's not in the field January 2023 realtors confidence survey by the NAR only 29% of home purchases last month we're now see this right here 29% of home purchases right here okay this is cash sales 29% of of transactions were cash sales so he's saying hey 71% of houses had to have a mortgage and so we're going to have this really incredible crunch in the market because most homes need mortgages and mortgage rates are so high and that's his thesis there but if you look at December 2022 it was 28% if you look at January 2022 that was before interest rates started coming back up you can see here on his chart that it was 27% so it's actually increased 1 percentage per column here and there's actually more cash offers more cash transactions right now than than there has been and I believe that number is going to continue to increase as we move forward with higher interest rates were made in cash meaning that the remaining 71% needed a mortgage to facilitate the transaction meaning that this mortgage collapse being worse than 2008 is a huge problem for the u.s. housing market this this housing crash is going to be worse in 2008 this is this is hilarious particularly in certain cities and states where the buyer demand has already collapsed significantly the more that inventory goes up and that buyers drop out of the market the more pressure there will be for prices to decline now let me be clear also there is some good data in this video and I I do believe that we're going to see prices continue to soften I think it's going to continue to just drift down a crash absolutely not a correction a mild correction and that's the exact term that feigning may used mild correction and I'll show you some numbers that they came up with here later on but the the buyer demand has completely collapsed he's not talking to real estate agent and sees that he doesn't really have boots on the ground asking what's really happening in the market this is all super speculative and it really plays I'm guessing to the algorithm and we are not even close to a bottom in this market yet especially with mortgage rates now going back up mortgage rates went down by a little bit over the last month and a half well they are now on the rise again up to 6.6% in the latest survey from Freddie Mac and they could go even higher in future weeks to 6.8 or 6.9 now what's very interesting is that he was right about this it did go to 6.8 and a little higher almost a 6.9 so he was right about that but what I think is very interesting when you when you look at this is that that little small you know downtick from the let's just say 7.1 or so down to you know 6.5 6.2 to 6.5 it was like the floodgates opened up and mortgage applications literally went up 28% in one week and so that you know the the slightest little decrease in interest rates every time we see this and we're going to continue to see better data when it comes to inflation and that is going to drive mortgage rates down that's going to drive 30 year fixed down you know as we see these inflation numbers come out the spread right now between the tenured treasury and 30 year fixed is 3% it's normally 1.7 to 2 right 1.7 to 2 2 is like the on the high end for the spread between the senior treasury and mortgage rates it's 3 right now which means there's a lot of room right there to come back down to normal from the tenured treasury plus you've got inflation that's going to continue to get better as we get better reports may 10th is going to be the big one where everybody's expecting to see really incredible year over year numbers and to see that situation improve dramatically only time will tell there and I'll definitely be reporting on it but let's continue to listen in 2023 we're made the transaction meaning that this mortgage collapse bigger demand and we are not over the last eight or six point little fundamentally priced out of the market and we won't see a bottom in this housing market it won't look like a good time to buy for you until we see both home prices and mortgage rates go down when both home prices and mortgage rates go down it will bring down this typical house payment in America which is now around $2,500 a month for a new home buyer that's double what it was in 2020 and it's also almost double what it was in 0607 before the 2008 crash we need to see this line go down significantly the house payment line before it is a good time to buy now there's a lot of people out there everyone who say that we're not going to see that house payment line go down they say prices aren't going to go down a lot of realtors and investors say this because their argument is inventory is low on the US housing market and as a result prices won't go down and we can see there is some legitimacy to this some legitimacy there's a lot of legitimate legitimacy to it and look at what he talks about right here this is very interesting claim according to the US Census Bureau it was only about 720,000 houses available for sale at the end of 2022 there's 720,000 homes for sale at the end of 2022 that's compared to well over 1.3 million houses for sale back pre-pandemic but what I want you all to pay attention to is the bar right next to it as you can see folks there's about 14 million houses that are sitting vacant on the US housing market not for sale which shows you that actually there's tons of inventory in the US housing market ready to be released onto the market and if only like 5% of all those people who own vacant property like investors or second and third home buyers if only 5% of them decide to sell and cash out at the top that would instantly double inventory on the US housing market and suddenly no one anymore would be talking about low inventory and okay right there you hear what he says if only 5% of the vacant houses that are second homes and investor owned houses were to list their home for sale that would be around 700,000 properties if they were to list that house for sale that would double the inventory overnight well the problem with that is a lot of things number one why would these owners sell there's going to be no reason for them to sell if it's a second home they enjoy being there they don't care what the market's doing this is something they enjoy this is a place they enjoy to go take their family vacations whatever if they're an investor why are they going to sell in that environment where prices are going to continue to drift down why are they going to sell lower prices rents are going to continue to be good even though rent is coming down and a lot of places and it needs to come down rent needs to come down rent needs to come down and mortgage payments need to come down that's why I believe that prices are going to going to soften and interest rates are going to come down dramatically throughout the year I say dramatically when I say dramatically I'm talking about like 1% maybe 1.5% something like that that's dramatic by the way and and it goes the same way when interest rates have shot up so much it's been dramatically it's been a dramatic upswing and that's why we're seeing this mortgage applications you know worse since 1994 and stuff like that because of the dramatics of it and it's really gotten squeezed into less than a year this this entire you know interest rate hike and mortgage rates from two and a half to seven has happened in literally less than a year that has never happened before of course we're going to see these type of things but if you take 5% of the vacant houses that's 700,000 houses let's just say and what he's saying is is if ever if all 700 listed on the exact same day that would never happen number one there's no reason for that to happen number two there's no reason for those sellers to automatically all of a sudden say oh I need to sell the markets down let's go ahead and go out here and sell that's not going to happen and if in fact there was 5% of those homes to go on the market it would happen over a long period of time so that that's pretty that's pretty dramatic to say that that that's where the inventory is going to come from because I've always asked this entire time through this to the bears where's inventory going to come from where's it going to come from builders are down 30% foreclosures are nowhere even near half of what they were pre-pandemic you know where's it going to come from people are sitting on four and a half percent interest 85% of mortgages are four and a half percent interest they're not going to sell to trade that mortgage rate in for a higher rate I mean some will but it's not going to be a huge influx of inventory so where's the inventory going to come from nobody knows but Nick here seems to think that 5% of the vacant houses out there are going to all of a sudden decide to list for no reason 4% in Tennessee and 100% in North Carolina now we're starting to see that inventory pile up in North Carolina in cities like Charlotte and Raleigh and Greensboro and Winston-Salem we're just starting to see that inventory pile up we're seeing a big reduction in home buyer demand on this graph inventory coming up 150% that's like that's like you have you know all time lows inventory you know and you've got 10 listings and then all of a sudden you've got you know 25 listings that would be 150% increase now when you look at those numbers yeah there's there's a lot more listings but when you look at pre-pandemic pre-pandemic guys is what I want you to pay attention to here when we start when we get back up to pre-pandemic levels in terms of inventory which there may be some local markets that are but but as a whole as a country we have 700,000 listings at the as of the end of 2022 and guess what inventory has plummeted since then we're lower right now and as a country we're kind of I think I believe we're kind of leveling out if you look at the redfin data we're kind of leveling out and we're getting ready for what happens every single year for inventory to slowly increase from now till about August and then inventory starts to decrease again that happens every single year there's going to be no surprise when inventory starts creeping back up because it happens every single year but when we say it's it's up 100% it's up 80% it's up 80% from such a small number and we're still not even we're nowhere near close to what we were pre-pandemic when we hit pre-pandemic levels and then we continue to go up from there and and buyer demand continues to drop at that point that's when we can start to really say okay there's more than a correction happening here and only time will tell that and I'm not predicting anything I'm not saying that I know what's going to happen I'm just saying that there's a lot of speculation here about there's going to be some kind of massive crash or shift in the market you can see the 15 metros in America with the biggest collapse in pending home sales over the last year what do you see Charlotte is number two at minus 54% Winston Salem and Greensboro there at minus 47% and you can see suddenly a lot of markets in the southeast like a Fayetteville Arkansas a Jacksonville Florida Cape Coral Florida a deltona Florida are suddenly struggling to find home buyers more not struggling to find home buyers so yes all those numbers are correct we're down dramatically but the economies are built on supply and demand okay supply we're supply we're still at an extremely low level compared to demand why are we seeing multiple offers right now across the country that would be my question to Nick here why are we seeing multiple offers all over the country you know people you know 20 offers per house not every listing right certain price ranges certain pockets certain locations but I'll show you at the end of this video I'll show you a screenshot of my Instagram post from earlier today that shows you exactly what's happening real boots on the ground quite the contrary in many situations because as buyers in a certain city see prices go down the FOMO just completely goes away it's at this point everyone that we need to talk about the economy so right here he talks about the economy over the last 50 to 60 years and what do you notice that he talks about the peaks here so so the peak the peak of home sales that happened you know four significant times you know in the past 60 years or so and what he goes on to say is that after the peak it's about a year or two and then we actually have a recession so let's listen in everyone is it after each of the previous three peaks we had a recession following those peaks in 1980 to 1982 we had a double dip recession 1990 1991 we had the Gulf War recession and then of course from 07 to 09 we had the great financial crisis indicating that the collapse in home sales we're seeing today is telling you that a recession is around the corner and it so the argument for me on that is that outside of the 2008 great recession during the other two recessions he's talking about where home sales peaked out and then within the next year so there was a recession during both of those times home prices did not go down they leveled out and kept going up they even went up during the recession so home prices didn't crash and that's why you didn't see him put that chart up of home prices during housing recessions because that would go against what he's trying to say here that we're going to see this you know crash of prices which in my opinion we are not going to see it takes about two years historically to go from peak home sales to the start of a recession which suggests that we could be in the start of a official recession by the middle of 2023 and if we do have a recession which I think is a pretty high likelihood that's going to make all the metrics of the housing market look even worse it's going to suppress buyer demand even more it's going to cause inventory to go up by more it's going to cause prices to go down and oh yeah it's also going to cause foreclosures so we know it's not going to make prices go down that doesn't mean that prices are going to go down he acts like that's just part of the package that prices are going to come down you know with a recession that is not always the case 100 percent haven't seen the foreclosures really yet fact the foreclosure rate is near and all time low right now however that's something that's going to change very soon and he's talking about foreclosures so with foreclosures what you have to understand and he's comparing this to 2008 okay and that's to get clicks on the video but compared to 2008 the average credit score of somebody with a mortgage is 770 right now versus 670 back in 2008 you've got 85 percent of mortgages that are under four and a half percent and not to mention that most of those mortgages are from you know pre-pandemic they're from before prices went crazy you guys realize there were six million transactions uh in 2022 okay there were five million uh in 2023 six six million in 2021 five million in 2022 okay there's 100 million houses out there and around 65 million or so have a mortgage on them so when you look at the market as a whole and you think about the the metrics here and how much equity so there's an average right now an average 58 percent equity in each house right on average across the country 58 percent equity so prices would have to go down dramatically to get down to a place where we're going to start seeing short sales and foreclosures now that doesn't mean foreclosures like foreclosures means people can afford their house notes and things of that nature but what you have to look at is the fact that jobs reports have been great wage growth has been great well we're not talking about right now we're talking about in the future we're talking about a recession that's gonna happen okay we'll sit back and watch that but I will say that we're in an incredible place right now fundamentally speaking compared to the fragile 2008 that we're comparing this to you know from the federal housing I'm gonna jump ahead to also have a recession right on historical data just as the mortgage market has collapsed for home buyers so what does all of that mean for you out there for someone who's either a home buyer an investor trying to decide when to buy one a big metric that I'm looking at to tell me whether a market is a good place to buy and when the bottom is going to be is the relationship between the cost to buy a house compared to the cost to rent an apartment and really what you want to watch out for everyone in your housing market is if this orange line the cost to buy is significantly above the cost to rent so if you see this right here right this is Phoenix Arizona okay the cost to buy 2600 2638 to rent 1858 right the difference there is $779 so I ran the numbers on this and I ran the numbers on this for a lot of different areas okay and what I came up with was that that $779 difference the during that payment when you buy the house and you're paying that higher mortgage rate than you would if you mortgage payment than you would if you were to rent it that's $779 around $600 of that is going towards principal okay depends on your rate depends on the price depends on terms and all that stuff but it almost equals the the difference there now you may say okay you're still losing you know $150 or something like that so I looked at this in LA I looked at this in Nashville I looked at this in Dallas and it all came out to be very close to the same which was the difference between what you could rent a house for versus buying a house for the difference you almost got all that back in principal now again you're still losing a little bit of money okay so but in my mind even as bad as it is right this second in terms of rent versus buying it still makes way more sense to buy long term if you're going to buy a house and live in it for 10 years you come out way ahead when you factor in appreciation yes in the short term there's a lot of uncertainty yes in the short term we feel like prices are going to continue to soften but in the long term we know that things are going to be worth more and we know that things are going to appreciate we're going to find the bottom it's going to come back up slowly and over the course of five to ten years you're going to have a lot of equity built up in that house through a principal pay down and also equity through appreciation and that number at the end of the day of equity that you're going to have in that house is going to be way crazier than the money you lost paying rent the numbers aren't even close and so what I think is very interesting right now is that what he's talking about isn't even figuring in two to one buy downs and mortgage rate buy downs which by the way I do feel like the mortgage buy downs are artificially holding prices up just a little bit longer than they should because buyers walk in to the payment being lower they're like okay I'll pay that little higher price because the payment I can afford the payment and so I don't think that necessarily is a good thing the good thing about it is the fact that you have to be approved for that end rate so say the rate is six and a half your rate's going to be four and a half the first year five and a half the second year and then six and a half you have to get approved for that six and a half percent rate so I think that that is a really good thing that mortgage that the regulators are doing that but I do feel like it's it's slightly artificially holding prices up maybe a little higher than they should especially on new construction because 75 percent of builders are paying for those buy downs but when you look at this buy versus rent scenario I believe that the scenario is going to get a lot better when you buy because prices are going to continue to soften and interest rates are going to get better but even as bad as they are right now it's still night and day better to buy over the course of a decade and guess what guys we're going to be here another decade we're going to be here we're going to be living here on this earth and time is going to go by whether you're renting or buying why not be building equity in in a house in a property so on and so forth so I'm going to switch over I want to show you guys before I run out of time here uh let's see bam I want to show you guys what some of these other agents are talking about right here so today I put out this post I said are you still seeing multiple offers right now even with these higher interest rates lately I mean there's hundreds of comments here okay you can go there and scroll through them yourself but this person says yes absolutely multiple offers uh over asking in Los Angeles yes multiple offers everywhere yes every offer I'm making in Dallas is a multiple offer every offer I'm making in Dallas is a multiple offer lower price point had 18 showings and three offers in three days she also goes on to note higher price points hardly any showings so again this is pockets but this is still happening right this is still happening yeah I had seven offers uh let's see even had multiple offers on an off-market property with one open house uh let's see this person got outbid by 20 offers this is all recent this is recent seeing them okay this person seen multiple offers with 30 350 to 400 thousand dollar condos let's see yes had a cash offer get beat out by five other offers I mean this is just on and on and on yes yes yes yes 11 offers on a 1.1 uh million dollar house in DC um let's see had to escalate to 15 plus I guess they had to put a escalation clause yes around the Disney area a lot yes five offers in total on my listing in the greater Los Angeles area um it goes on and on and on here guys yes and no depends on the property some buyers refuse to enter the bid and wait to see what the first offer goes um just had one with 97 showings and 24 offers I mean that it goes on and on and on here right here Fannie Mae talks about okay they talk about while Fannie Mae expects inventory levels to remain constrained it says tight inventory alone won't been enough to stop the housing correction okay following the 2.5 drop in US home prices in the second half a 22 Fannie Mae expects US home prices to fall another 4.2 percent in 2023 and then in 2024 they say they expect prices to fall another 2.3 percent so Fannie Mae is saying that prices fall 4.2 percent this year 2.3 percent next year but here's the punch line if Fannie Mae is right okay if Fannie Mae is right this housing slump would see the national housing market pass through a mild home price correction okay not a full-blown house housing price crash right after all if these price drops do happen that they're talking about national home prices would end uh 2024 still up 29 percent over march 2020 price levels okay that's strong that is strong but anyway I just wanted to do this for you guys basically just to stand up to some of the a lot you see a lot of videos you see a lot of articles you know that just scare a lot of people scare a lot of buyers scare you guys scare a lot of agents and brokers and yeah there's some there's some data that looks scary mortgage applications and this that and the other and look here's the punch line of the entire video it doesn't matter I know people are saying oh we said all that now you're just saying it doesn't matter oh that's just you're just bs no actually if the market gets back to 2008 that means prices went down about 50 how easy is it going to be to sell stuff and how many great deals are you going to pick up oh well I'm going to own a house and it's going to be worth 50 less but yeah so will every other house so when you sell it to trade up you're right you're you're you're buying something that is also 50 percent lower than it was hello guys hello um you know what what bad is going to happen here if if that were to happen now that's because you're watching this video and you understand my philosophies on this and how we win either way if we're an agent if we're a buyer if we're a seller if we're an investor how we win no matter what the market does I'm prepared for anything and I want you guys to be prepared for anything I don't want to sit up here and sell the dream of false hope that everything's just going to be you know wonderful I mean right now there's a lot of agents struggling and that's why I'm going live in about an hour to answer all those struggling agents questions I'm going to put a link in the bio for that so you guys can join there in about an hour and I'm going to do everything I can do to help as many of you guys through your situations to keep pushing and don't quit so anyway that's it for this video I'm going to put another video right here for you to watch I'll actually put a video here of me calling live prospects an old school video of me calling prospects live so enjoy that let me know if there's anything you can do for you in the comments we'll see you on the next video which is right here by the way keep selling