Why The Upcoming HOUSING CRASH Will Be WORSE than 2008!

In this video, we’re going to dive into why the upcoming housing crash will be even worse than what we saw in 2008. We’ll kick things off with some recent news, like the average 30-year mortgage rate in the United States, which has just crossed the 7.6 percent mark. Then, we’ll take a close look at the similarities and differences when compared to the 2008 crisis.

This explanation is key to truly grasping all the news regarding the current economic downturn, such as recessions, inflation, the collapse of the US dollar, and the housing market bubble itself.

we’ve all heard the news the average 30-year mortgage in the United States just surpassed 7.6% this makes it the highest level since December 1st 2000 from this perspective the situation has become dire everyone is now wondering how it’s possible that this Market remains stable what started as an annoyance has now expanded into one of the worst asset bubbles in finance history the story of how we got here is one that explains the future and raises ser ious red flags regarding the future states of this unstable economy the housing crash that’s coming will be the worst we have ever experienced and to show you why we take one step back into history looking at Clear evidence that what is happening today is far from normal you see a lot of people when they show you a chart like this they’re showing you housing prices throughout history but this chart has a severe flaw it fails to capture the all important aspect pect of inflation over a 40 or 50e period the power of inflation is often overlooked when someone says I bought a house in 2000 for $200,000 that doesn’t necessarily make it a deal because $200,000 in the year 2000 is worth about $356,000 in today’s $ 2023 meaning that while on paper this person is up on his home it’s not a real gain so in order to measure a bubble we have to adjust for inflation and showcase how much home prices really went up to do that there is the inflation adjusted case Shiller which without boring you to death shows real home prices this chart will show us truly how home prices are overpriced without the illusion of the falling dollar and as you can see right now we have surpassed the last bubble which was considered Monumental in terms of US history in fact based on the pioneering res research of Robert J Schiller and Carly case we have relatively good data on housing prices going back to 1889 and as you can see 2008 was absurd the price of a home reached a level that was previously believed to be impossible to reach and while there has been a trend of growing real prices in the last 100 years it’s still clear that today’s bubble is now worse than what we saw in 2008 this span was considered normal but since about 2012 we’ve left all sense of normality so what makes me think that we’ll end up back here well there is a point in this argument where I think the Bulls lose their ability to argue against a crash it starts with a bit of History it wasn’t really all that surprising to see the 2008 bubble start to develop after the year 2000 the reason for that was interest rates throughout history interest rates were high when you apply them to today’s standards for the last 30 years we’ve had a slow decline in rates this enabled the ingredients for the 2008 bubble to form and collapse but that wasn’t our lesson in fact after the 2008 bubble the FED continued to suppress rates at new records they pushed them down to 2.6% at some point and of course they started a new bubble from late 2011 to today the real price of a home meaning the inflation adjusted price Rose 66% outside of the 2008 rise this country has never seen a rapid acceleration like this and each time it’s happened we witnessed a crash to bring this phenomenon in line with the historical average now if you look at this chart and say to yourself well that just isn’t enough for me there is another body of evidence that in my opinion is the nail in the coffin it essentially proves that something in the market must give now before I show you this as ECT please take a moment to help the channel out by hitting that like And subscribe button each like is a massive help for the channel and I would greatly appreciate it if you just took 2 seconds to press that button now back to what I was saying you see while the housing market is heavily influenced by interest rates we know that most buyers and investors are purchasing using some sort of loan typically the 30-year fixed mortgage now without diving too deep into this topic we know that the 30-year fixed rate mortgage is essentially a derivative of the 10-year treasury basically this financial instrument dictates what mortgage rates will be now the question is what does this have to do with my home and its value well to answer this and finally put the nail in the coffin we have to understand a bit of context imagine a 10-year treasury note like a special kind of paper that the government uses to borrow money and the way they do that is pretty simple simple they take your cash with a promise that they’ll give you the money back with a little bit of Interest after 10 years currently the interest rate they are paying is 4.5% now here is where it gets interesting there is also a 2-year treasury note and if you look at that one the interest rate they’re paying is 5.02% which means that the government is paying you a higher interest rate to borrow your money for 2 years instead of 10 years typically it’s supposed to be the opposite meaning that the longer you let the government borrow the higher the rate is supposed to be when the rates are inverted like this you get something called an inverted yield curve long story short inverted yield curves are the most obvious signal for a recession when a situation like this happens the chances of a recession are nearly 100% if you look at this chart going back to the late ’70s every single time the line went below zero which signals an inversion What followed was a recession this was true in the early ‘ 80s early ’90s early 2000s 2008 2020 and now if you zoom in you can see the problem this chart is from 2022 so it doesn’t show the new developments but essentially we have gone even deeper in the inversion and are now starting to come back up now you might think well we’re coming back up which is good news maybe we’ve managed to avoid the storm but this couldn’t be further from the truth the worst and really when the recession typically starts is after the inversion is complete and the line moves past zero into positive territory look at 2008 it was years after the inversion that the Real Pain began right now we have a situation that’s extremely troubling the FED is pushing rates to the brim but the bond market is sort of calling their Bluff and this is really my final point when it comes to a future crash you see for example the 30-year yield is essentially the same as the 10-year yield this means that investors are starting to think that there will be some serious inflation in the future we know this because every rational person would buy a 30-year treasury if their rate was attractive but it’s not because there is so much uncertainty regarding the next few years this is why buying the 10year for the same yield is possible because because in order for the 10year to sell you need incentive and the incentive is a rate that’s absurd when compared to the 30-year now if you don’t understand this part it doesn’t matter but essentially investors will believe that inflation will continue to be high based on these treasury curves and if that is true you have to think if the FED is raising rates to beat this inflation eventually to have inflation pop off again you need the FED to capitulate and in order for that to happen you need a crisis the crisis is right here in our face the complete destruction of the housing market via this apparatus right here rates are like gravity and right now we are entering unknown territory when something breaks it will bring down this massive House of Cards that’s been building since 2012 and the bubble that we used to know as the biggest will look like nothing compared to this now before we wrap things up let’s see how this housing market crash will affect homeowners and investors it’s not just about higher interest rates and potential economic slumps it’s a big deal for regular folks and smart Real Estate Investors for homeowners when interest rates go up those with adjustable rate mortgages or folks looking to refinance might struggle with higher monthly mortgage payments this could lead to more foreclosures and a bunch of homes on the market at rock bottom prices as for investors especially those who bought properties thinking they’d keep going up in value they’ll face new challenges as prices drop they might end up with properties worth less than what they owe and less rental income thanks for watching as always please don’t forget to hit that like And subscribe button if you enjoyed it