Is anyone else concerned that the U.S. economy, and consumer spending, is now almost entirely reliant on the 2nd largest stock market bubble on record?

Long-term average Shiller P/E Ratio is 17.8x

Today we're at 39.8x.

Only time that stock market valuations were richer was in 1999. 1) Rising stock market valuations are continuing to drive consumer spending in America, with the Top 10% of U.S. households by income now driving nearly 50% of Consumer spending, according to Moody's.

By the end of Q4 2025, there will be more 6% mortgages than sub-3% mortgages. 1) The shift in interest rate composition of existing mortgage holders will have a big impact on new listings in future quarters and years.

As more and more mortgage holders take on higher rates, through the natural attrition of sales and refinancings, there will be more pressure to sell.

Lennar is showing you what has to happen in the housing market to drive sales.

They've cut prices 22%. And are now below pre-pandemic pricing.

The result? Sales orders have spiked.

Lennar's margins have compressed to 17.5% as a result of the price cuts. But that's just how it goes in a housing recession - to move inventory, and sell homes, you need to accept less.

Existing home sellers would be wise to take note. 1) Lennar's new order book is 2x bigger than it was prior to the pandemic, and they're gaining a massive amount of market share.

They're essentially showing everyone in the housing market what has to happen to bring sales back.

Most people still aren't paying attention, though.

We literally have the worst homebuyer demand on record according to the NAR's pending sales index.

Time for people to wake up and realize prices are the problem. 1) Fed cut rates almost one year ago, and demand went down.

Think about that. September 2024 was the first rate cut, and the pending sales index back then was between 76-79.

Now it's 72.

Buyer demand dropped after rate cuts.

Austin, TX's rental market has corrected hard.

Asking rents are down 18% in the last three years.

And now, rents are almost back to pre-pandemic levels.

Apartment developers in Austin are taking it on the chin after overbuilding in this market for the last 5 years.

The good news? Austin is now one of the most affordable markets in America to rent, relative to local incomes. 1) It's wild to see how rents in Austin have changed over the last six years.

July 2019: $1,279/month
July 2022: $1,631/month
July 2025: $1,344/month

28% boom.

18% correction.

And now rents are only 5% above the pre-pandemic norm.

The immigration boom from 2022 to 2024 is hiding a startling fact:

U.S. natural population growth has plummeted.

With growth from Births minus Deaths clocking in at only 502k in 2024.

That's down about 70% from the mid-2000s. 1) Plummeting natural growth can have a variety of consequences for the U.S., and is primarily driven by two factors:

Increased deaths, due to the aging of the population

Stagnant births, also due to aging, and due to lifestyle choices of younger generations

Historical cost of Buying v Renting.

This explains everything about the current housing market. 1) Today's premium to buy of $713/month is one of the highest on record, and a key reason why homebuyer demand is near record lows.

First-time buyers are doing the simple math, and deciding to stay renting, since it saves them money in the short-term.

For the first time ever, it is considerably cheaper to buy a new house than to buy an existing house.

Likely signals an inflection point in the housing market. 1) In June 2025, it was roughly 8% or $33,500 cheaper to buy a new house from a builder than to buy an existing house.

This is only the 6th time in the last 26 years it has ever been cheaper to buy a new house.

Immigration has dropped to essentially zero.

What will the housing market impact on demand be? 1) According to John Burns, from 2022-24, all of the growth in renter households came from immigration.

While only 5% of buyer demand came from immigration.

We did rate cuts last year.

It didn't work. 1) The myopia among many people in finance and real estate right now regarding round two of rate cuts is shocking.

Once again, people are getting jazzed up to think the Fed will "save the housing market".

Somehow forgetting that we went through this already last year.

North Port, Florida.

Getting closer to fairly valued.

Once the green line crosses below the grey line, it's a "buy signal". 1) A good question is how far undervalued prices could go.

In the last downturn in North Port, values became around 27% undervalued.

Dallas housing supply is through the roof.

Active listings measured almost 32,000 in July 2025.

The average for July going back to 2017 is only 20,000.

60% more inventory than normal. 1) The inventory spike is happening pretty much everywhere in DFW.

All major counties are now above a 50% inventory surplus.

The biggest problem in today's housing market is not mortgage rates.

Rather - it's homeowners clutching onto an unsustainable amount of homeowner equity.

Today, homeowners have over $34 trillion in equity on their houses - more than 2x higher than the 2006 bubble.

It's the biggest homeowner equity bubble ever. And it's keeping hard-working Americans locked out from buying a house (because prices are too high).

Sellers who come to market today are often refusing to cut the price to the market-clearing price, and even de-listing their homes. This is further perpetuating the worst housing affordability crisis we've seen in 40 years.

The solution: home prices need to correct, by around 15-20% on a national basis, to bring the market back into balance with homebuyer incomes and interest rates. This type of correction will not be that damaging to the economy, since most homeowners would still have plenty of equity. (in this scenario, homeowner equity would drop to around $25 trillion - still almost double 2006).

It's important that lenders, realtors, investors, and government officials understand that unsustainable prices and homeowner equity levels are what is creating the worst home sales transaction market in decades.

Not mortgage rates. 1) For perspective, today's homeowner equity levels are north of 115% of GDP, the highest level of all-time.

Indicating that home prices and equity growth have far outstripped the growth of the economy, incomes, and inflation.

It's not sustainable, and needs to correct.

Nashville's housing market was previously one of the biggest boom markets.

Now it has one of the biggest gluts of unsold inventory of any metro.

With nearly 11,000 homes for sale, the highest level in almost 10 years.

Nashville's inventory surplus is now at 62.7% above the long-term average. Indicative of a market that is in correction. 1) Home values in Nashville dropped -0.18% in June 2025 every month.

And the year-over-year value metrics in Nashville are now essentially flat, at +0.1% June 2024-25.

At Reventure, we are forecasting a -7.2% over the next 12 months.

Inventory in Nashville is through the roof.

Some neighborhoods now have 115% more supply than normal.

This excess supply is largely coming from investors selling, combined with a reduction in buyer demand.

Don't be surprised if home values across most of Nashville flip negative over the next 12 months.

Access the inventory map at reventure.app. 1) The supply run-up in some of these ZIP codes is wild.

Pre-pandemic inventory of 100 homes.

Now there's 300 homes.

Home builders have 9.8 months of supply on their lots.

Has only happened 6 other times in U.S. history.

5 times it led to a recession. 1) Long-term median Months of Supply is around 5.8 months.

Meaning today's home building market is 70% more oversupplied than normal.

U.S. homeowners have $34 trillion in equity.

That's almost triple the levels in the 2006 bubble.

As a % of GDP, it's the most housing wealth homeowners in the U.S. have ever had. 1) This record equity is a negative for the U.S. Housing Market.

It means sellers are holding onto an inordinate amount of housing wealth, locking prospective buyers out of the market.

Home prices in the U.S. are 16.5% overvalued in 2025.

This is a higher level of overvaluation than what we saw at the heights of the 2006 bubble.

After that last bubble, prices became undervalued, and the period from 2008-2019 was a great time to buy a house.

However, today the market has become too expensive, with home prices outpacing wage growth.

The result is an overvalued and unaffordable market.

This is the main reason why homebuyer demand is so low in 2025. Fix the overvaluation, fix the homebuyer demand problem. 1) This overvaluation data is based on the relationship of Home Values and Incomes in the U.S. Housing Market.

Home prices during the pandemic went up way faster than incomes, pricing out homebuyers, and resulting in the highest overvaluation we've seen in decades.

Orlando, FL's housing market is correcting fast.

Supply is at a 10-year record, up 142% over the last two years.

Sellers are struggling to sell their homes, and prices are dropping.

Orlando's market is heavily exposed to macroeconomic forces like travel and tourism. And there's currently a -6% YoY decline in traffic at Orlando International Airport.

That decline is now showing up in local economic and housing market weakness.

Home values are already down -2.6% in the last 12 months. And they are still about 15-20% overvalued after that drop. So there's likely more downside coming.

Access the housing market data for Orlando at reventure.app. 1) Overall, there were 14,391 active listings on the Orlando metro housing market in June 2025 according to data from Realtor.com.

This is the highest active listing count since at least 2017, and likely the highest going back to the end of the last crash in 2012.

All 4 of the major counties in the Orlando metro (Orange, Lake, Seminole, and Osceola) are experiencing this inventory spike.

The difference in cost between buying a house and renting has reached the highest level on record.

Today, your monthly payment for buying a house is $2,800/month.

While the typical rent is $2,049.

The resulting $750 premium to buy means that many would-be first-time homebuyers are content to rent and wait out the market.

Which helps explain why the housing market in 2025 has remained sluggish, and why home values are now dropping in most states on a month-over-month basis. 1) A quicker way to understand this reality is by comparing how much the cost to buy has increased v the cost to rent over the last 5 years.

Mortgage Payment: $1,481/month --> $2,801/month (+89%)

Rental Rate: $1,517/month --> $2,049/month (+35%)

So the cost to buy has increased by more than 2x faster than the cost to rent since the pandemic started.

The reason no one is buying houses right now is because U.S. housing market affordability is literally at the worst level in the past 35 years.

Today, an American making median income needs to spend 39.7% to afford the monthly mortgage, tax, and insurance payment.

The long-term norm is 29%.

And during the depths of the last housing crash, it became as cheap as 22%.

For a rebound in the housing market to take place, this Mortgage Payment/Income Ratio needs to get cheaper, probably closer to 30%.

To get there, home values need to drop 15%, and mortgage rates need to drop 1.5%. 1) I don't think people realize just how far off we are from buyers returning to the market.

It's not a matter of a rate cut or two.

It's a matter of home values correcting significantly, and some type of mega Fed rate cut and/or recession bringing Mortgage Rates into low 5% range.