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.

Home builder inventory over the last 40 years.

Only other times it was this high: 2022, 2008, 1991.

All are either recessionary scenarios or near recessions.

This is ultimately good news for homebuyers. It means cheaper prices are around the corner. But potentially bad news for builders, and those who bought near the peak of the bubble.

There could also be an economic spillover in terms of construction job losses and downturns in regional economies most exposed to home building. 1) And this is more a story about the South in the U.S. than anywhere else in the U.S.

In the South, there are now 311,000 new builder homes for sale.

That's the highest level on record, even eclipsing the heights of the 2006-07 bubble.

No one is buying new homes that are under construction or permitted.

Months of supply for both is sitting between 15-20 months, which is basically the highest on record.

Meanwhile - completed spec houses have a decent sales pace of 3.6 months.

Meaning extremely weak demand in the future for builders. Any short-term success on sales is simply being driven by having lots of completed inventory and giving mortgage rates buy downs/cutting prices on completed homes.

The long-term outlook, measured by sales pace for Under Construction/Permitted, says demand is fundamentally weak.

And that the Housing market will continue to get cheaper. (which is good news for buyers) 1) Consider that the Months of Supply for homes Permitted but not Started is literally the highest level on record.

Meaning basically no one right now is willing to enter into a sales contract for a home to be built.

That says a lot about the current state of demand.

The housing downturn is broadening.

With over 60% of U.S. counties experiencing monthly home value declines in May 2025.

That's one of the highest percentages going back almost 3 decades.

The only other two times in the last three decades when this many counties reported a monthly drop, according to Zillow, were 2022 and 2008-2012. 1) This indicates that the U.S. housing correction is no longer just a Texas and Florida downturn.

In fact, over 30 states showed a monthly contraction in May 2025 according to the Zillow data.

The housing market is definitely slowing.

Especially condos.

With the condo months of supply on the market hitting 6.7 months in May 2025.

Highest level since the 2006-12 downturn.

Single-family supply is now up to 4.4 months. 1) It wouldn't shock me if condo inventory keeps climbing to levels not seen since the last housing bust in 2008-09.

Single-family will also likely keep increasing in future months.

Don't be surprised if condos are at 8+ months of supply by year end, while single-family is above 5.

The cost of buying a house with a mortgage has exploded.

Back in 1955, it cost $112/month to take out a mortgage to buy a house.

In 2025, it costs $2,800/month. That's an astounding 2,300% increase over 70 years.

In the last five years alone, mortgage costs have nearly doubled.

These costs have surged faster than people's incomes, creating a massive housing affordability crisis.

The question is: what happens next?

Following the 2000s housing bubble, there was a crash, and mortgage costs dropped 40% in half a decade.

But following the 1970s housing inflation, there was no crash. Instead, home-buying costs stabilized for two decades, allowing incomes to catch up.

I see similarities in 2025 to both previous eras, as we are in a massive home price bubble today (similar to the mid-2000s) and have also experienced rampant inflation over the last several years (similar to the 1970s).

The net result is that no one can afford homes right now. And the only cure for this is a combination of cheaper prices, lower mortgage rates, and higher incomes.

And it might take years to get there. 1) One thing is for sure: the current trajectory of housing costs is not sustainable.

Homebuyers are priced out of the market, and demand has collapsed as a result.

Many people in real estate keep tricking themselves into thinking a rebound is around the corner.

But there will be no rebound so long as prices remain high.

The U.S. housing market just broke 1,000,000 listings.

Excess inventory is piling up.

Relative to buyer demand, we now have the highest inventory in close to a decade.

Which is causing home prices to drop in over half the U.S. 1) This was the highest active listing count for May since 2019, according to data.

This is important because it signals that sellers are now facing stiff competition to sell their homes.

A marked reversal from the pandemic boom, and a signal that gains in affordability are coming for buyers.Realtor.com

Home values declined in over 60% of US counties in April 2025.

The only other two times we saw this breadth of home value declines was the 2008 crash and the 2022 mortgage rate spike.

More than half the country is now officially in MoM declines. Indicating that the housing downturn is spreading.

We'll have to see if this lasts into the future, and if it turns into a sustained correction like 2008 or is a blip like 2022. But given the trajectory of listings and inventory, it seems like more value declines are coming. 1) We have to be careful not to overanalyze one month of data. However, to see 60%+ of US counties recording a decline on Zillow's home value index suggests something big could be happening.

Florida investor bought for $550k in 2022.

Just sold it for $391k.

28% loss in 3 years.

Market turning down fast. 1) What's interesting about this house is that the investor, a Blackstone-owned entity, purchased it for $550k in April 2022.

And then turned around and tried to sell it two years later. Listing for $529k in April 2024.

The house sat on the market for a year, and they incrementally lowered the price until finally it sold.

We have the biggest gap ever between Home Prices and Mortgage Rates in 2025.

Prices are 90% above the 130-year average.

Meanwhile, Mortgage Rates are right around the long-term average (6.7%).

The resulting gap makes one thing clear: home prices are too high and need to come down. 1) Particularly telling is how this Home Price bubble, in inflation-adjusted terms, is even bigger than the one in 2006.

Homebuyers intuitively know this, which is why they have stopped buying homes.

The U.S. is in the midst of a severe demographic collapse.

Births are plummeting, deaths are rising, and our organic population growth is down 72% over the last 15 years.

Back in 2008, the U.S. Experienced:

4.31 million births 👶
2.44 million deaths 💀
1.87 million organic growth

Fast forward to 2024, and the figures are:

3.61 million births
3.09 million deaths
520,000 organic growth

That 520,000 organic growth figure is a mere 0.15% of the U.S. population, meaning we basically have no more growth from natural means (Births-Deaths).

Not good for the housing market or the economy, and a serious issue that needs more attention. 1) Here's a potentially better way to visualize this: the natural increase in the population as a % of total population.

In 2024, the natural increase fell to only 0.15% growth.

Back in 2008, it was at 0.62% growth.

Shades of 2008 playing out in Florida right now.

In this case, the seller bought from a builder for $317k in 2023.

But have since had to cut the price to $265k because the builder is now selling the same floor plan, brand new, for less than $250k.

The seller has lost 16% on their original investment, and is $52k in the red. 1) I think the biggest misconception I see in Florida among local residents is that home building is a good thing for property values.

Lots of people still think that when you see builders, it's good for appreciation, and a sign that the area is "growing".

But in this part of the cycle, lots of home building is a negative for property values.

Over 60% of US Counties registered home value declines in April 2025.

The largest share in over two years. 1) There's only been two times before in the last 25 years where Zillow reported this many counties experiencing monthly value declines.

2008-2012 crash.

And the mini-correction that occurred in market in late 2022.

The national housing market continues to weaken.

Single-Family Months of Supply: 4.17 (highest since 2016)

Condo Months of Supply: 6.16 (highest since 2012)

What's hidden in the national averages is that certain states (TX, FL) are starting to look a lot like 2008. While other areas (NY, IL) are still looking like the pandemic.

A bifurcated housing market downturn is occurring, with values now dropping in 50% of states.

Watch this months of supply indicator in coming months, because it could go up further. 1) Generally realtors say 4-6 months of supply is a "balanced market".

But that is no longer the case, as home prices are very overvalued today.

The more overvalued that prices get, the more sensitive price growth becomes to months of supply increasing.

Zillow just reported monthly home value drops in 27/50 states.

This is no longer just a Texas/Florida downturn. 1) Florida, Colorado, DC, California, and Washington led the way in value declines from March to April.

Next was Arizona, Louisiana, West Virginia, Texas, and Georgia.

The national housing shortage is over.

With resale inventory on the U.S. Housing Market hitting nearly 1 million listings this spring.

Listings bottomed in April 2022 at around 379k. Since then, they have nearly tripled.

To the highest level of supply since 2019. 1) Good news for homebuyers, no doubt.

Higher inventory is going to put downward pressure on home prices, with values already starting to drop month-over-month in about 50% of states.