"It's The Worst Demand Market EVER" For Housing | Nick Gerli @ReventureConsulting

Summary

• Market Outlook: The guest projects a continued housing downturn in 2026 with historically weak demand, falling sales, and affordability as the dominant driver of price action.
• Rental Deflation: Rents are declining nationally with vacancies at decade highs and large concessions; Equity Residential (EQR) data shows new lease rents falling while renewals still rise, highlighting tenant negotiating power.
• Migration Dynamics: Domestic migration has slowed sharply, decoupling from price growth; Sunbelt states that once led inflows now see weakening prices, while the Midwest/Northeast remain more resilient but increasingly overvalued.
• Inventory Trend: National for-sale inventory is climbing back toward pre-pandemic levels; the guest expects pressure on prices to intensify as listings rise toward 1.0–1.1 million and seller expectations reset.
• Homebuilder Discounts: Builders have cut list prices ~14%+ and offer mortgage-rate buydowns, with net effective prices down as much as ~25% at major builders, pressuring resale values and leaving recent buyers in new communities potentially underwater.
• Distress Signals: Short sales and foreclosures are rising as protections roll off; examples in Florida show 30–40% realized losses, while higher ownership costs and rising consumer delinquencies add to downside risks.
• Policy Considerations: Proposed ideas include a temporary capital gains holiday and longer depreciation schedules to spur investor selling; recent administrative actions (e.g., restricting institutional SFR buying, curbing immigration) are deflationary for housing.
• Opportunities and Risks: Potential buy signals may emerge in corrected markets like Austin as overvaluation normalizes; renters can secure meaningful concessions now, but sellers face mounting pressure from rising inventory and weakening demand.

Transcript

Google searches for homes for sale are at their lowest level ever. Mortgage applications are 40% below where they were in 2019, 2020. It's the worst demand market ever. And not enough people in real estate fully understand this. And more sellers really need to understand this. There is going to be no saving grace. There's going to be no, oh, Kevin Worsh comes in as a Fed share and he cuts interest rates. It's not going to matter. It's not going to matter. The only thing that's going to matter is more inventory and lower prices. Welcome to Thoughtful Money. I am Thoughtful Money founder and your host, Adam Tagert, welcoming you here for a special uh report on the housing market here in 2026 with my good friend Nick Jurley, who's been on this channel many times, keeping us updated on where things are headed. Uh Nick, thanks so much for joining us. you put together a whole bunch of great charts for us and you have found uh an article right before we went to air here uh basically showing that uh realtors are declaring a new housing crisis as home sales drop by 8%. Um so my friend, thanks so much for joining us today. Looks like we got a hell of a lot to talk about. >> Great to be here with you, Adam, talking about the 2026 housing market and yeah, it's off to a rough start. The sales in January 2026 were close to the worst ever. Down 42% from their pandemic peak, down more than 25% from the long-term average, down 8% uh from December 2025, down 4% year-over-year. And yeah, the realtors are saying we have a new housing crisis because the the demand's not coming back. The demand continues to crash. >> Okay, the demand continues to crash. So, um, you know, we've been seeing the softening of the housing market now for a good a good while. Um, I think most viewers here probably quite familiar with the fact that that unaffordability uh is the theme of the US housing market. Um, many people have called it frozen. Um, you know, basically houses have got to a level of unaffordability that the vast majority of buyers really can't afford them. So, the people who can transact uh are are mostly the already wealthy. Um, so the houses that are transacting are kind of your higher level homes, which is kind of keeping the average home price, you know, from from crashing the way that sales have so far. But, uh, we got a lot to go through here, Nick, but I'm just at a very high level here. Do you expect home prices to start decelerating, accelerating to the downside the way that supply and demand has? >> Yeah, I think uh we do here at Reventure, Adam. I mean, we have downward forecasts for about half of the US housing market in 2026 based on current data, based on the current data and inventory and days on market. That's not really yet factoring in this recent sales report. And if this demand continues to trend negatively uh like we expected to over the next couple months, I think we're going to probably have to revise down our forecasts in quite a few different states and cities. And the thing to understand is that actually we have already been seeing big price declines in certain markets. This isn't just a demand crash. We are seeing uh prices drop in places like Austin, Texas, Phoenix, Arizona, Tampa, Florida. Many of these markets are now down double digits or more from their peak in 2022. So one by one, the dominoes keep falling. Demand is crashed. Certain uh big Sunbelt boom towns are going down. We're even seeing builders now do some of their biggest price cuts since 2008. And so, yeah, you know, our forecast is probably going to be trending to the downside as the year goes on. >> Okay. So, you you we've talked over the past year about some of these Sunb Belt boom towns that had pretty big price corrections. You just named a whole bunch of them. Have any of those falling knives hit the floor yet uh in any markets in your opinion or are are all those markets still heading downwards? Yeah, that's a great question. Probably the closest is Austin, Texas. So, in Austin, values are down close to 25% over the last three and a half years. That's a full-scale crash. That's much bigger than what Austin's downturn was in 2008. It only went down 5% in 2008. It's now down 25% since 2022. >> We have continued downward forecast for Austin because there's so much inventory on the market. However, on the other hand, we are uh starting to see that the market will soon become undervalued if these declines continue over the next six months. So, I think probably by the middle to the end of 2026, Reenture might have some buy signals in markets like Austin, uh potentially some markets in Florida where the values have really gone down a lot already. >> Okay. Um but you're not there yet, it sounds like. And we'll talk at some point this conversation about the tools you're developing to help people determine when a market has gone from being overvalued to undervalued because that can be really useful as a potential property buyer. Um, you know, there have been a lot of people in the Northeast, in the Midwest, who I think up until now, more or less, have sort of leaned back and watched this as somebody else's problem. Yeah, this is the problem of those Sunb Belt states. this is where things got really crazy, but I don't need to really worry about this cuz my area is protected. Um, is that still the case or as you project forward this, you know, continued rough year here in 2026 for housing on average, uh, do you expect things to get a little bit worse in those previously immune areas? >> Yeah, it's an interesting story. It's kind of a mixed story there, Adam, is on one hand, we look at the inventory in markets like New York, say Westchester County, outside of New York City, or we look at some of the nicer suburbs outside of Chicago, and we see very low inventory in 2026. We see bidding wars even in some of these markets, and our forecasts are still pretty high, pretty positive in 2026. So, in some sense, the Northeast and Midwest is still insulated from this downturn. However, when I look at the fundamentals now in some of these markets, they're becoming pretty overvalued. And many of these markets are still losing people due to domestic migration. The census just came out with some data. New York State lost 138,000 people in 2025 due to domestic outbound migration. Illinois lost 40,000 people. New Jersey lost people. Massachusetts lost people. So, how long can these Northeast and Midwest areas continue to lose people but still have a low inventory resilient housing market? I don't totally know the answer to that question. However, I am starting to pay more attention to those fundamentals which are starting to degrade with more people moving out and uh a higher overvaluation rate now showing up in some of those states. >> Okay. So, we'll put the potential of a recession with job losses and stuff aside for a moment, but but just with the the demographics. Um, you're seeing uh net migration from a number of states uh kind of in these, you know, I won't call them protected areas, but areas that were we're doing fine. basically their their their um logic has been there's a lot less available land to build on here and so you know we're not going to have a huge supply of inventory because of that an over supply of inventory and that may be true in some markets but if if your housing stock stays the same but your population comes down it's almost the same dynamic. Um so obviously you're going to be looking at at at the net migrations closely. Let me ask you this. um in addition to people who are leaving and it'd be curious to hear, you know, if you have any insight as to why they're leaving. I mean, I would guess in certain cases, like if you live in New York City, maybe you don't like how the election went there with a new mayor who's, you know, looking to increase taxes and so maybe you're looking to move to a a more tax uh friendly state. But uh in addition to to those people who are you know leaving themselves, what role if any do you think uh the deportation of illegal immigrants is having here? Um because uh you know where are we now? I think we're think we're getting close to 3 million or so that have have uh either self- deepported or or been deported. And um I don't think necessarily, and you correct me if I'm wrong, I don't think necessarily those folks were necessarily competing at the home buying level all that much, but they were renting. And uh we have a ton of rent deflation, which you and I can talk about in just a moment. And housing house prices really are a secondary function of what rents in the area will support. Correct. So if the rental market's weakening, the housing market uh should eventually weaken. So, are you seeing any direct impact that you can point to from the deportation of illegals? >> Yeah, Adam, and I kind of want to draw draw a clarification here because I think it's important for home buyers, investors, and sellers, and homeowners out there to understand these migration trends because they're going to have a huge impact on the housing market in 2026. There's two types of migration. One is what's called domestic migration. Uh, that's what the US Census Bureau calls it, and that's where Americans are moving. you know, uh, people who are already here, where what states are they moving into and out of? Then the other is international migration, right? What you were just talking about, there's also legal immigration included in that. >> Um, are we seeing higher or lower levels of international migration? And undoubtedly, we're seeing um almost 50-year lows in international migration, which is starting to have a big impact on the rental market. So, this is a research article from the Pew Research Center talking about how migrant encounters at the US Mexico border are at their lowest level in more than 50 years. And here's the data, Adam. We had this big surge uh in migration over the border in 2022, 2023. We had uh 2 million people per year. We had 1.7 million people in 2021, 1.5 million people in 2024. This was close to, I believe, 7 to 8 million uh migration in a 4-year span. A record by far. However, that has now dropped down in 2025 to 237,000, which is the lowest level going back all the way to 1970. And where this is having an impact on the housing market is with rents and rental demand. Because if we look at apartment lists national rent report, they're reporting that rents are now dropping for apartments, they're down 1.4% year-over-year. So we have apartment rent deflation for face value rents. In addition, landlords are giving big concessions. On top of that, one month free, two months free. And the the real reason why is this vacancy index, the apartment vacancy index. it uh keeps climbing and it stabilized there for a little bit in 2024 when that big surge in immigration converted to renter demand, but now it's rising again in 2025 into 2026. Vacancies for apartments are at the highest level going back 10 years. It's actually a record in apartment list data set. And this is now something truly being felt by landlords in the US and many investors. I was just on a road trip to Texas a couple weeks ago and Adam, what I saw blew me away. I was walking through communities in metros like Houston and Dallas where there was dozens and dozens of empty rental homes. I had not seen this before. You know, I lived in Texas. I had been to Texas before, but I had never seen this many empty rental homes. There was one community in particular, there was 60 houses for rent. Literally one quarter of all the houses had a for rent sign in front of them and I do believe it is linked to that decline in immigration. Of course we also know the job market especially for new college graduates is not so good in 2025 2026 that could also be lowering rental demand increasing vacancies. But the key point for your viewers to understand is that when we see declining rental demand and declining rents, that's a deflationary signal for the housing market overall. So in case someone had some question maybe about if the market's in a downturn or is it going to continue? Is this collapse in home sales really meaningful? Well, consider that home buyer demand is down 42% from 2021. At the same time, renter demand is dropping as well. What does that tell you? Aggregate demand in the housing market's going down. Now, let's add that additional layer on migration. Where are Americans moving in 2025 into 2026? This is going to have an even bigger impact uh on where some markets uh trend because uh where Americans move has more of an influence on home prices, right? The immigration demand is more rents. Home prices is more where Americans move. And on this map here from Reventure app, we're looking at year-over-year where prices are dropping in blue. They're dropping in the states in blue and then where they're going up in the states in red. And it's this bifurcated story of the Midwest and Northeast continuing to be resilient, but prices now going down on the west coast of the US. Even in California, even in Nevada, prices are now going down. They're going down in Arizona. They're going down in Colorado. They're going down in Texas. But they're also now going down in this chunk in the southeast. North Carolina, South Carolina, Georgia, as many of you all know, Florida is also going down as well. Now, I want to flip this graph for you guys here and show you how the price growth compares to domestic migration. What do you see? It's almost the inverse. It's almost that the states that attracted the most migration in 2025 here in red had the home price declines. And comparatively the states where the prices are going up had people leave in blue. And this is somewhat you know counterintuitive like why are why is domestic migration now decoupled from home price growth? Because the intuitive reasoning for almost everyone in the housing market is that people moving in means that prices are going to go up. But we're not seeing that anymore. What we're starting to see is that affordability, affordability is really what's driving things more and more. And the reason why the Midwest is performing well in terms of home price growth is because it's the most affordable. However, we need to not just look at what the current migration is. We need to look at what the migration trend is. And this is where problems start showing up for states like Texas and Florida. You might look at this graph and say, "Oh, Texas is doing great. They added 67,000 people in 2025. That's the second highest in the US. However, when we click into Texas, what do we see? We see a big issue on the trend. Two years ago, Texas added two three years ago, Texas added 219,000 net people due to domestic migration. Now, it's 67,000. So Texas is still second place in aggregate people moving in, but it's actually down over 70% from the pandemic peak and the lowest level of domestic migration since 2005, which is not good for Texas. >> Hey, hey, Nick, could I chime in on that just for one second? So, I'm I'm just I'm just guessing here, but I'm curious. So, obviously the peak in 2022 was Austin was red-hot. Everybody wanted to move there because they could either work from home um or you know a bunch of tech companies were moving there uh you know building uh skyscrapers and everything like that. Um and then all of a sudden the Austin bubble burst, right? Um so could still be there be a fair amount of people that are moving to Texas in general, but that's being somewhat offset by the people who, you know, lost their job in Austin as Austin started correcting or, you know, realized, oh my god, you know, the market's here not what I thought it was. I got to go back and find some other place to live. >> So that's a good point, Adam, and that's definitely somewhat part of the issue. However, what we're actually seeing overall, uh, this is a Bank of America study on migration patterns. What we're seeing overall is actually just a big decline in people moving overall. So, if you look here, Bank of America is looking at data on how many movers there were. Uh, this uh, orange line as a percentage of 2021 being indexed to 100. You can see the amount of moving in the US is down 50% from 2021. So that's that's a problem, right, for Texas if there's just half as many people looking to move, especially to a different state or MSA. Then Texas is just going to have lower inbound migration, right? Um and then obviously you're right, it's a net figure which also includes people moving out. Maybe some people are moving out because it became too expensive. You know, additionally, Florida is one where this is happening too. Look, look at this graph on Florida domestic migration and tell me how how similar this looks to what we saw in the leadup to the last downturn. >> Florida migration peaked at 311,000 in 2022. It's now down to 23,000. So Florida still added 23,000 people domestically in 2025 net, but that's the fourth worst reading on record, right? So these states that have positive migration, yeah, they might look oh good and rosy on this on this uh map is they're here in red, but when you actually click into the long-term averages, like in Arizona, we went from 105,000 domestic migration in 2020 to only 31,000 today. And this is a big problem for these Sunb Belt boom towns because it's not about our people moving in. People are always moving in to these states. some amount of people. The issue is how many, >> right? >> And when we're seeing in Arizona, Texas, and Florida, as well as Nevada, when we're seeing these migration numbers at close to the lowest level in 35 years, that's going to spell issues for the local housing market because builders in these boom towns permitted housing expansion at the levels supported by the higher migration. And we're seeing that permitting pipeline now be delivered for both houses and multif family apartments and condos. And the people just aren't there to buy it. >> The demand's just not there. >> The demand's just not there. And again, the demand's not there. And in case some of your viewers have a hard time believing that, and you know, I know some people do because the prices are still high, so they think that the demand is there. Home sales are down 42% from peak. They're almost at the lowest level on record, lower than the 2008 to 2012, right? So, the demand to buy is incredibly low, which is a huge issue in these boom towns when you have the supply exploding from builders and you also have the local prices in these markets now detached from local fundamentals. Where you are in Reno, Nevada, houses are, you know, I think the typical house there is 550,000 for just a standard house. For a nice house, you're talking probably a million dollars. A local person in Reno cannot afford that. Same goes for Las Vegas. Same goes for Phoenix. Same goes for Dallas, Houston, Nashville, Tampa, Atlanta, all these boom towns. And they're all feeling something pretty similar when we look at the data in terms of excess inventory, prices now starting to trend into negative territory and the demand remaining low. >> Um, all right. So, uh, this in in many ways, right? So, as we said earlier, uh demand is down. It's a staggering stat that you've mentioned there, right? Demand down 42% from peak, right? So, we're not quite we haven't quite cut it in half yet, but we're getting close, right? Um and uh the as a result, as we said, you know, um transactions are down. Uh it's really only the affluent I'm painting with a broad brush here, but but who are transacting. So, that's kind of kept prices artificially high. So, the thing here that's going to likely break the dam, I believe, because we've talked about this in the past, Nick, but correct me if if I'm mistaken here, is going to be supply. It's going to be inventory hitting the market. Um, we've got, you know, the pipeline of of developers that's going to continue because it has it does them no use to have a half-built house just sitting there, right? So, they get to get these things finished and pushed on the market. There's a whole bunch of other factors that we could talk about there. in in terms of um what's going to influence inventory and I got a bunch of questions for you here about that but but just at a high level Nick what are what are the inventory trends that you're seeing right now I know that that's probably played a pretty big role in places like Florida and whatnot but are are we starting to see more and more inventory come on do you expect that o over the course of the year >> yeah you're totally right Adam the inventory story is the one to watch because you know prices are still high due to the fact that existing owners often just can't get out of their own way. Existing owners saw what their household uh neighbor's house sold for in 2022 and they think that that's what it's worth and they they'll get a a listing agent. They'll get a realtor. The realtor will tell them, "No, it's not worth 500. Priced it at 440." They'll price it at 500 still. And then in some cases, they'll then get frustrated and delist the home. So we're seeing mainly the stickiness in the market. Why it's not correcting like it needs to correct uh on a national basis is due to the seller u delusion I would call it seller delusion on what their home is worth uh for houses to actually transact. Prices need to be down probably 20% 15 to 20% on a national basis but we're not there. And part of the reason we're not there is inventory. So, you know, we have uh we added the national inventory figures here on Reventure App. There's 912,000 homes for sale as of January 2026. Now, you could see here it's been basically a steady march up from these ridiculous pandemic lows on inventory. In January 2022, there was only 377,000 homes for sale. So, we've just been kind of moving this inventory figure up and up over the last four to 5 years and disproportionately kind of in the sunb belt, right, is where a lot of this inventory is coming from. You could see here we're almost back to that preandemic January 2020 inventory level. Not quite, but almost there. It was around a million in 2018. So, we still have some wood to chop on inventory. I think that's the lesson your viewers should take. Improvements in national inventory are occurring. However, we probably need to get this national inventory figure to probably over a million, probably to 1.1 million before I think some of the sellers are really going to be forced to cut the price. However, one thing to note is that inventory is seasonal. So, we got up to that 1.1 million inventory figure in July, right? We kind of held there and then you can see in the winter the inventory comes down, right? And we actually kind of had a especially pronounced inventory drop this winter due to the fact that a lot of sellers who are frustrated with this slow market pulled their homes. >> Right. We >> I've heard I've heard the term rage dlisting. >> You know, it's a funny term because um Adam, I've spent a lot of time studying the psychology of sellers over the last couple years. I've lived in Nashville, Tampa, Dallas, Austin. And I've lived in all these pandemic pandemic boom towns and I know realtors in all these boom towns and I and I talk to them about what sellers are thinking. And the predominant explanation I get is that yeah, the sellers are out to lunch. You can show them the data in some cases and it won't matter. One realtor actually here in Nashville had an interesting uh tidbit for me. He said, "Nick, maybe it's not that some of the sellers um don't want to accept a lower price. is that they can't accept that price. >> Some people bought the second or third car based on the fact that their home value went up. Some people maybe bought the condo in Florida based on the fact that their home value went up. So, uh, that person actually financially can't handle their house going from 600 to 500,000. So, I think we might be kind of in this situation where there's a lot of cash poor homeowners who either don't want to or financially cannot afford to cut the price. That could be something that's occurring in the market right now as well. >> So, for that person, time is not on their side, right? Because in addition to all the defformationations of the housing market we saw during the pandemic, we saw the just the cost of ownership go up dramatically, right? their property taxes, their insurance, uh the cost of maintenance, etc. So, you know, forgetting about a job loss or something like that in their lives. Those those higher costs of ownership are kind of a ticking clock if they're already sort of financially pinched. Correct. >> Great point. A lot of the owners in this market think they have leverage. They think that time is on their side. And this is potentially the biggest disconnect in reality that I think a lot of people in real estate need to actually uh inform sellers and owners on is that time is not on your side. Uh you might be enjoying your 3% mortgage rate or 4% mortgage rate and you're like, I'm going to hold out another year, but what the reality is is that the current ownership stock of housing in the US, these owners are paying more and more on their costs every single day. Property taxes are going up, insurance is going up faster than wages in many cases. And this is going to structurally push more inventory on the market just from a structural basis. And one interesting data point that I actually kind of want to show you and your viewers, Adam, is the comparison of the percentage of people that have a mortgage above 6% >> versus sub 3%. Because one argument we consistently hear from housing market bulls is they say something like this. They say the housing market won't crash in terms of prices because there's just all these people with sub 3% mortgages who will never sell. You can let me know if you've heard people say that. >> Sure. >> And that was maybe true 3 years ago. However, it's not true anymore. This graph sourced from Fanny May is comparing the orange line, the percentage of people with a 6% or higher mortgage to the blue line, the percentage of people with a sub 3% mortgage. And what do you see is that in the third quarter of 2025, this is already like four, five months ago, 21% of mortgage holders had a rate above 6%. Which was more than the percentage of mortgage holders that had a rate less than three. So we now have more, let's just call it higher or normal mortgage rate holders in the market than we have sub 3%. And this is where the inevitability of more new listings becomes very clear, >> right? You could have made this argument in 2021, right, where we had 25% of mortgage holders with a sub3% rate and only 8% with a plus 6% rate. You could have made this argument that like, oh, just like people are going to hold out, right? How you going to make that argument now? Every passing day, every passing month, every passing quarter, we just have more and more people taking on the 6% plus rate mortgage. There's just some amount of some amount of transactions is happening, a low amount. Refinancings are happening. Some people are taking money out. And what this is going to mean, Adam, is that as these new crops of owners go to sell in the next couple years, you know, the owner that bought in 2025 and 2024, as these new crops of owners go to sell, they are not going to have this wiggle room, so to speak, where they can afford to just keep their house vacant for 6 months or they can just say, "I'm going to rent it instead." They're not going to be able to afford to do that. their payments 3,000 a month, 4,000 a month, probably $1,000, 1,500 more than they can actually rent it for. >> And this is what I mean by the pressure is going to start to kind of hit and close in on sellers and existing owners. And if a seller is smart and they want to divest of their property, especially in a market that's trending down already, you still maybe have a moment to get in and sell, right? If you can price your price your house fairly. But if you list as a seller this year in 2026 and you think you're going to get that 2022 price, it's just not going to happen. >> So, what I think is really important about that chart you just showed is you have to remind home sellers that um homes are priced at the margin, right? It's what the last house transacted for, right? And so what people have been telling themselves, as you were saying, for the past couple years, look, nobody's going to sell their homes because we're all locked in at these tasty sub3% mortgages, right? And I think I think you showed a couple years ago, yeah, you had you had way more people who were locked in like that than you had people who had really expensive mortgages. But now the people with expensive mortgages outnumber the people with low mortgages. So you only need those people to decide to move or sell. They're going to be setting the price of the market, not you anymore. That's exactly right. And that's where current owners and sellers have the illusion of leverage, right? They have the illusion of the idea that, oh, I have my low payment, nothing bad's going to happen in the market. Um, and for some of them, they might not ever sell, right? I mean, hey, if you have a 2.5% mortgage rate, you might not ever sell. But that component of the market is dwindling in size every day, every month, and it's becoming less and less impactful. Yeah. Um all right. Well, look, one of the thing I wanted to note here too is um obviously one of the things that will accelerate the action here will be more inventory coming online. But we don't necessarily need that for more pressure to come on home prices because to your point, Nick, the aspiring home buyer, right, who's really frustrated, they've been waiting to be able to buy and they felt priced out. They're looking around at their market and they're saying, "God, you know what? just home prices aren't coming down enough for me to feel like I can afford one. But man, rents are coming down. You know what? Forget buying a house at least for the next couple years. I'm just going to take this nice tasty rent and I'm going to rent for a few more years. So, that itself is taking additional demand out of the market. So, as long as rents keep um deflating here, it's going to put a lot of pressure on home prices. Correct. >> I I would say so. I mean, certainly putting pressure on demand. I mean, like I can tell you, you know, I moved back to Nashville about six months ago and I'm I'm sitting in downtown Nashville right now and I'm looking around at the rental market and u you know, I got I got a place in the suburbs and you know, my mom moved in with me. She moved from New York. So, I'm looking for another place. And so, I've toured probably like 10 different apartment buildings. And Adam, it's insane what they're offering on a 13-month lease to live in a brand new high-rise in downtown Nashville. Like, the nicest rooftop pool, great gym. They're giving you three months free rent on a 13-month lease. >> Live there for free a quarter of the year. >> Live there for free a quarter of the year. That's a 23% cut to the rent. So, some of these units are maybe a onebedroom's 2,300. Uh, a nice onebedroom's 2,300. They give you then 3 months free. That's like,750 net rent. Now, for some people, maybe that sounds expensive, but that's in like the nicest, newest luxury property in the city. You go out to some of the newer ones in the suburbs, they're giving you two months free. The onebedroom gets you down to,400,300 a month. I was just in Austin, Texas, and the uh rents in Austin are down 22% for apartments in the last three and a half years. Austin is now back to prepandemic rents. Unbelievable, >> right? And we can have a whole separate conversation about what that means for the commercial real estate and multif family space. But for a renter or prospective first-time buyer, it means that time is on your side. It means that you can negotiate. It means that your cost of living and your cost of shelter might just be going down year after year if you know how to look for some of these deals and negotiate. Now, the one thing I I'd like to caveat here, Adam, is the distinction for your viewers out there between what's called new lease rents for apartments and houses and then renewal rents. Because this is something to really pay attention to, especially if some of your viewers are in these markets where rents are going down. Austin, Tampa, Phoenix, Vegas, Nashville, right? Is that we're seeing new lease rents drop and potentially drop by double digits, but the landlords still tried to increase the rent on renewal. And to show this point, I want to show your viewers uh the SEC filings of Equity Residential, who's one of the biggest multif family apartment rates in the US, their fourth quarter 2025 earnings. You can see here they break out their rents by market by new lease change and then renewal rate achieved. And what you could see is that in the fourth quarter, new lease rents dropped 4.7%. For apartments, meaning like if you found a new apartment, moved, your rent was 5% lower. >> Mhm. >> However, on renewals, they went up 4.4%. >> So, we're giving discounts to new renters. We're continuing to increase the rent for existing renters. And the most aggressive example of this is Denver. In Denver, get ready for this. New lease rents dropped 18%. In the fourth quarter of 2025 for equity residential, unbelievable. Denver's apartment market, rental market is tanking right now. However, even with that, they still achieved plus 2.5% on renewal. What this means is that if you are a renter in one of these markets where rents are dropping the most, here's data from real page showing markets with the biggest year-over-year rent declines. Austin - 7.6, Denver - 6.4, San Antonio - 5.3, Phoenix - 4.7, Tampa - 4.5, Charlotte - 3.3, Nashville - 3.2, Raleigh, Houston, Salt Lake City. Biggest rent declines. This is effective rent. Understand that your landlord might still try to increase your rent on renewal. It's beholden though on you as a tenant to understand what's going on in your market and to look at competitive properties. And if you want to stay, it's not a bad idea to try to negotiate with your landlord. Three years ago in Nashville, when I renewed my lease, I had a two-bedroom apartment. I was able to negotiate two months free on my renewal at my existing apartment. And I think a lot of people don't know this. They think that when they get the renewal up 2 or 3%, they think it's just like the end of it. Um, almost always try to negotiate and try to get a better deal and try to show them some of the comps, especially if there's other properties giving one, two, or three months free in your market. Uh, just a little tidbit if someone's a renter out there. >> Yeah, I know. I think that's super useful and practical. Um, so yeah, if you're living in one of those markets and your rent is your uh lease is coming up for renewal, just go shop around, see what what somebody's, you know, what discounts they're willing to offer you to to hop uh hop uh uh residences and go, you know, move over there and then send that to your existing landlord and say, "Hey, look, you know, you got to you got to make me stay here or else I'm going to go take this great offer." Um, let me ask you this, too. Um, Nick, um, so when we've been talking about inventory so far, we we've we've really been referring to inventory of homes for sale, but because rent is now becoming such a impactful factor here in in the whole equation. Um, do you know, are we seeing increases in rental inventory as well? And I can see some potential drivers for that. So, you know, we've talked about like the um uh the institutional buyers who who bought a lot of units and we've talked about people who bought the Airbnbs during the Airbnb craze. And I think if those things aren't penciling out anymore before you get to the point where you say, "Well, I'm going to list this thing and sell it," you try to turn it into a long-term rental. And so, are we seeing an in, you know, an increase in long-term rentals that is contributing to the softness in the the rental uh in the rental market because there's just a lot more units available for rent now? >> Yeah, it's a good question. We don't directly track rental inventory data, but I can tell you through my own personal observations just in these different states like Florida and Tennessee and Texas and Arizona that there is a lot of rental inventory on the market. There was some articles from over the summer also about how um regular homeowners are starting to compete in the rental market. Some of those people with the sub 3% mortgage rate uh are becoming landlords because they don't want to give up that sub 3% mortgage rate. That kind of increased the rental supply a bit. Someone who would have sold their home turned it into a rental. Now, we know that that's not going to really continue too much in the future uh due to the increase in mortgage rates, but that was one factor. Additionally, you have the demand, and I can't overstate, you know, the demand weakness in the rental market at the end of the year. That combination of lower immigration and then a weak job market for college graduates is really freezing the demand incrementally, which is also increasing more inventory. And then, yeah, maybe some people who did Airbnbs, to your point, maybe some of them realized that that's a harder business to operate than they thought and they just decided to do a long-term rental instead. But one key thing that I think we're going to start looking at in 2026, Adam, is distress. We're talking about inventory, rental, for sale, rents, demand, but the distress of sellers. And what we're starting to see now is um more distress. We're starting to see an increase in foreclosures. Depending on the metric, foreclosures were up anywhere 15 to 30% year-over-year at the end of 2025 into early 2026. Some of that has to do with the fact that the Trump administration removed some of the foreclosure blockers that were still there from the Biden administration. So, the foreclosures are up and I'm starting to see in Florida especially some major major distress. And I actually kind of want to show your viewers this because um you know it's this kind of shows how reality is setting in. This is a house in St. Petersburg, Florida uh in a you know I would say pretty desirable area. Actually lived in this city in 2024. Um, a lot of people want to kind of buy a vacation house here, but there's also people who want to live here full-time. You could see that this is a three bed, two bath. It's now pending. $297,000. This is a moveinready house. This looks pretty nice, at least based on the pictures. Um, has a pretty big backyard. If we can kind of get to the backyard here, you can see it's kind of actually pretty pretty nice lot. Um, in a pretty dense part of St. Pete. Let's take a look at the pricing history here. You can see that this house sold in March 2023 for 425,000. So, this was kind of peak bubble pricing, right? $425,000. This is now pending at $297,000. So, that's a $127,000 loss from 2023 pricing. and you look at the 297,000, that's actually kind of starting to get close to what the preandemic pricing was of 265. And the reason I I want to show this to your viewers is so they can understand that this is actually happening. This is not theoretical. This is happening. This is actual owners, actual listings on houses that look to be movein ready. $125,000 losses. Now, why is this the case potentially? Well, we know St. Petersburg is going down, right? But take a look at this short sale. This is a short sale. What a short sale is is uh when there's a mortgage default and a serious delinquency on the property, sometimes the bank and the owner will agree to just try to sell the property instead of going directly to foreclosure. And I I think that probably has something to do with the fact for why um this owner slash the bank is aggressively cutting the price because they just want to get rid of the property. and on the market equilibrium there there wasn't the buyer until they cut $125,000. So these are real declines taking place uh in a place >> and sorry to interject but that that's a sign not just of distress on the homeowner but also on the banks as well where they're kind of losing faith right and they're just saying look we just want to at least get some of our money back so let's stop the bleeding and just try to unload this thing >> that's also an interesting point you know I think ultimately the banking sector is tied to the housing sector you know my hope would be in this downturn that the banking sector remains resilient I think they are better insulated than they in 2008. But for sure, you know, I think a lender probably sees the property taxes in Florida, the insurance costs in Florida. They see that the rental market's not great. >> So, they say, "Hey, let let's get rid of the property." I want to show you another one here. Actually, after >> and as you're pulling it up, just let me clarify. I didn't mean to imply that the banks were were uh uh distressed to the point they were in 2008 where I'm worried about bank failures. I'm just saying they know the market and they could say, "Well, let's wait it out, right?" You know, or whatever. They're they clearly are uh pessimistic enough about the housing market to say, "Nope, let's just let's just dump it and get what we can." >> Yeah, I I think that point is correct, you know, and when you see those declining rents, higher uh ownership costs. Here's another one in Florida in Ocala, Florida, Central Florida. This is this is another interesting one. Now, it's on the market for rent at 1875. This was an investor who bought it, but again, take a look at the history. What happened here? This was a new build, I believe, from Dr. Horton in 2022. Sold for 365,000 in 2022. Then it sold in 2025 for 224. >> Wow. >> 40% loss. >> Wow. >> $140,000 loss. That's a loss. This is not a price cut. This is a loss from what the owner paid. And then it was purchased by an investor at $140,000 discount. They put it on the market for rent to 2,000. They've now cut the rent to $1875. >> Right. Well, it looks like they tried to sell it first and there were no >> buy sometimes. I I don't know for sure. That could be potentially an ownership transfer. I'm not totally sure, but what I am sure about is that this was another uh short sale forclosure that ended up getting cut 40% from the previous price. So, this is folks, this is happening, right? And you ask yourself the question, you know, let's just look at this zip code 34476. Uh how much is Reventure App saying the values have actually gone down in this zip code? 34 34476 Ocala Florida and this is what I want some of that your viewers to understand is like you know so we're saying values are down this data source from Zillow is saying values are down 4% in this zip code in the last year um and it's they're they've gone down three years in a row 2% 2% 4% 8% decline so far but we have an example of a house that went down 40% %. >> Mhm. >> And this is a key point to understand is that the actual market clearing equilibrium price is a lot lower than people realize in many of these markets. And that if like demand, if you want demand to come back, if you want transactions to actually take place, you might need 30% price cuts, right? You actually might need that in certain markets. I think the other interesting thing about this listing is the rent. This shows you also how declining rents are at play here, too. This investor is clearly trying to pencil what they should buy it for relative to the rent. I think they got a decent deal, but then now they're already cutting the rent >> to $1875, which impacts their ROI and their cap rate, which probably pushes down what investors are willing to pay for these properties. >> Sure. And right now, as of this moment, that's unrened, right? He might need to lower it even further. Right. >> That's still unrened. It's in a homebuilder community. This is the other interesting story. What's going on in homebuilder communities, Adam? Homebuilders have cut prices 14% from peak. So, while the existing owner side is like scratching and clawing not to cut the price unless they really have to, builders are much more pragmatic. They kind of need to build and sell homes, so they just cut the price. Back in October 2022, the peak builder price was 460,000 for a median house. Now it's 392, 14% price cut. In addition, builders are also offering mortgage rate buyowns. So you could make the argument that the net price from builders is down more than 20%. In the case of >> I was I was going to ask you. Yeah. Okay. So it's even greater than the 14% price decline that you mentioned. >> In the case of LAR, the second biggest builder in America, their net price is down over 25%. with all the incentives that they're giving. You know, in some cases, they're giving 3.99% mortgage rates for 30 years uh for someone to buy the house. So, you could get a mortgage rate in some cases 2 to 3% below market if you buy from a builder. And they're cutting prices. So, what's happening though is the builder sales are back to normal. Builder sales are now back to 2019 levels. They're not at pandemic highs. They probably won't ever be again or at least for a long time, but at least they're back to normal. And what that shows is further proof, right? If you want to drive sales, if you want to drive demand, what you need to do is cut the price, right? And builders are doing that and they're proof positive of that being a lever to bring buyers back into the market. Existing owners haven't cut the price in earnest >> and the sales volume is 42% below 2021. And it'll stay that way until existing owners cut the price. But what I think is interesting in these builder communities is there might be some hidden distress starting to build is a lot of the builders give um low down payment mortgages. They have their own mortgage arms, FHA mortgage program, VA mortgage program. I think Dr. Horton does about all 80% of their sales they use their mortgage arm and about 60% of them are VA FHA mortgages which are those firsttime home buyer loans with either 0 to 5% down. So what happens to those owners if builders then cut the price? If you put two down 2% down or 3% down on you know first-time buyer in a builder community, you're all excited like I'm owning real estate. that builder in many cases is now giving the newer version of that floor plan two years later for a 15% discount. >> You're now underwater. >> Yeah. >> On your mortgage. And I think there's some hidden mortgage distress showing up now in some of these builder communities due to how aggressively they've cut the price. And that's going to be also something interesting to watch in 2026 as well. Um, a couple other points, Adam. You know, the Trump administration is trying to pursue an investor ban, Wall Street investor ban. That might also extend to investors buying in home building sites. It might al, you know, potentially also buying resale homes. That could have a big impact on the market as well. There's a lot of things moving around in this housing market in 2026. It could cause some some big shifts. >> Okay. Um, so super fascinating. I hadn't actually had that thought in my brain before about the people who live in these homebuilder communities being caught by surprise, probably being pretty angry that, you know, I just bought my house from you, you know, a year and a half ago and I'm already down 15% because you're offering all these, you know, bennies to to new buyers trying to get them in here. Super interesting. I also want to ask you about Trump and the administration. Um because there's been a lot of recent uh you know talk from the administration about hey we really want to help uh home home buyers and home owners and I'm curious how they plan to do that both at the same time. But real quick I want to show you a stat and and ask your opinion on it Nick. Um so the New York Fed puts out a um a report every quarter and um uh this is it. Uh it's got a whole bunch of charts, but they track um loans and uh the status of loans in terms of, you know, whether they become delinquent or defaults. And you can see here that um in in recent years, uh debt delinquencies have really started rising. Um and they've just shot the moon on student loans. Um which isn't super surprising um because people didn't have to pay them for a number of years. and the prior administration had sort of been sending them a strong signal that well we're going to try to get this stuff canceled anyways, right? So people I think changed their their spending habits assuming they'd kind of never have to repay these loans and then of course the loans have now gone back into repayment. So you're seeing a huge immediate spike in delinquencies there. But you're seeing that then kind of um uh contagion going into other types of consumer loans, credit cards, auto loans um and even mortgages. It's lower for sure, but it's starting to rise, right? And so, you know, I think a lot of that's due to kind of the pay Peter to rob Peter to pay Paul phenomenon where, oh my god, I've got to pay these student loans back. So, maybe I got to skimp on my credit card and my auto loan or maybe my house payment uh this month. To me, this seems to have continued upward momentum from here. And so as you you know as unaffordability is has been the main factor here in today's housing market this is going to continue to weigh on that because people are now having to you know spend a greater amount of their disposable income on servicing their debt. So, how worried are you about this continuing to keep unaffordability a challenge uh on the demand side because people just are are more and more burdened by the debts they hold? >> For sure. I mean, think about the mindset of an average first-time home buyer right now. You know, you look at these prices and you say, "Hey, this $500,000 house was $350,000 5 years ago. I I don't want to pay that. That feels overvalued. I feel like the value is going to go down." On top of that, you look at the payment on that house and it's going to be, you know, 3,300 a month and your rent is 2,000 a month or 1,900. So, you're like, I also don't want to take on I can't take on a 50% higher monthly payment. Um, and then you say to yourself, yeah, like, oh, I maybe went to grad school and acrewed this credit uh this uh student debt and you know, the job market, you know, for me in the white collar professions isn't so good right now due to AI. Like, maybe I have a decent job, but I'm not confident, right? like that I could potentially get a raise or get a better job next year. Um, and then, oh yeah, by the way, I finance a lot of my spending on my credit card and the credit card interest rates are 24%. And um, you know, I'm kind of barely keeping my head up trying to afford that. That combination suggests to many people that buying a house isn't even like remotely in the carts. >> Mhm. >> And I think that's what a lot of people in real estate miss. They think that there's just this massive cohort of wouldbe buyers who's just ready, you know, ready to buy and that we if we lower mortgage rates a bit, you know, I this is the one mistake the Trump administration makes is like they still focus a lot on mortgage rates and buying mortgage bonds and they think that that's going to do something. The reality is the inertia in the home buyer market is the biggest we've ever seen in US history. Many people in real estate don't understand this that between the credit card debt and the student debt and the overpriced prices and the fact that for three or four years they've seen these sellers continue to gouge the price. People are just over it. People are just over it and they're either they're getting this mindset that it might a never happen, right? Some people are thinking it might not ever happen and other people are just saying, "Hey, I have a line in the sand even if I have the money." Some people are saying it needs to go down 30%. I'm not going to I'm not going to buy it for more than that because the property taxes are insane. The insurance is insane. I have this I have to take care of all the maintenance. Why would I do that when I can live 50% cheaper in a brand new apartment building? They take care of all that. And >> I I mean I got to admit I've kind of been in that cohort and still am right now. >> Yeah. Oh, likewise. You know, I'm starting to look at buying some investment properties now that the prices are dropping in certain markets, but I'm even thinking the same thing. I'm thinking like this just seems like a headache, right? Meaning that the price has to go to a point where it's just a no-brainer. I'm on negotiations in a property in Atlanta right now. They're offering something where it's down about $130,000 from what the previous owner bought it for in 2023. >> It's down about $80,000 from the 2021 purchase as a new build. I'm still not sure that that's a no-brainer price, right? I'm having to think about it, >> right? Because I see all these issues potentially with buying and you know I want your viewers to understand this because >> I don't think anything is going to change soon in terms of demand like you know yes the price is going down you know will help but this is a graph looking at a home buyer demand index that we just came up with at reenture app. >> Gosh is an ugly ugly chart. I mean, it's a very valuable chart, but that is if that were a stock, you know, not be buying and probably looking to short. Yeah, >> you'd be out. Adam, on this on this graph, we look at mortgage applications, pending sales, real estate searches on on the internet for for real estate. And then uh we also look at home buyer sentiment metrics. So, we look at kind of this composite of all these different things. It's not just one it's not just one demand metric. It's it's a bunch of different things. In February 2026, it's a five out of a 100. Like I And the worst it got in the last downturn was a 30 or a 29. Wow. >> We're at a five today. 80% of Americans say it's a bad time to buy a house. We've never seen anything like that for an extended period of time. Google, >> that might be the most important chart in housing. Google searches for homes for sale are at their lowest level ever. Mortgage applications are 40% below where they were in 2019 2020. It's the worst demand market ever. And not enough people in real estate fully understand this. And more sellers really need to understand this. There is going to be no saving grace. There's going to be no, oh, Kevin Worsh comes in as a Fed share and he cuts interest rates. It's not going to matter. It's not going to matter. The only thing that's going to matter is more inventory and lower prices. And if you actually don't mind, Adam, I have like a suggestion for how I think we can fix the housing market. >> And pretty quick, >> everybody would love to hear that. >> In pretty quick secession. I've given the suggestion a couple times on my YouTube channel and a couple posts on X. I've messaged some people actually in the Trump administration about it. And I think that this would be a gamecher for the housing market. It's two policy changes, uh, two tax code changes that will push inventory to the market, lower prices, and also transfer more homes from investors hands to regular owner hands hands. And it's two things. One is we need a shortterm capital gains tax holiday for two years. I propose that all long-term homeowners in America and investors who have owned for more than 10 years for the next two years pay no capital gains tax when they sell. Currently, long-term capital gains tax is 20%. So, if someone's booked big appreciation, especially an investor, one reason why they might not be selling is because of that big tax bill that's going to hit them due to capital gains. Let's get rid of that for the next two years. Why are we through tax code disincentivizing people from selling their homes? >> That's number one. That would cause a massive surge in listings, especially among investors. You have to include investors in that. And those investors would often sell to regular owners. And no capital gains tax, no 20% capital gains tax means they can cut the price more to make the transaction happen. That's number one. But number two, simultaneously we should change the rules on depreciation for residential real estate. Currently, residential real estate investors can depreciate the structure of their house at 27.5 years. What that means is that you take the value of the structure, say it's 200,000, 300,000, you can depreciate it at around 3.5% per year on your taxes, which is a tax write off. That's why many investors continue to hold. Let's increase that depreciation timeline from 27 a2 to 39 years to match commercial properties. If you do that, the annual tax savings and annual tax write off for residential real estate investors will drop, which will increase their incentive to sell, decrease their incentive to buy. If we do those two things, which are just simple changes to the tax code, which is actually just fixing the disincentivized system. Currently, the tax code incentivizes investors to hold. let's incentivize them to sell. I honestly think this housing market could fix itself in a year or two if we were to do that. >> That's really interesting. Um I'll have to noodle on that, but I totally get the logic. Um is a part of me that kind of hates rewarding the people that kind of helped create the system we're in by giving them the the tax game holiday. But hey, you know, having a a much more reasonable, resilient housing market, I think is a price it's a price worth paying. Um, have you floated this to anybody in any form of of governance and gotten any feedback from them? >> I have floated it. I haven't yet gotten feedback, but hopefully I will get feedback soon because I think it's a great idea and I think it's the only way that we can actually quickly um make make a big change in the housing market. >> And and are these these are federal tax laws you're talking about? Um, so is there anything that a let's say there's somebody watching who's, you know, in a state congress or or whatever. Um, is this this is a change that would happen at the federal level. It's not something that could be affected within a state itself. Correct. >> No, it's federal Yeah, it's federal tax code. Uh, Marjorie Taylor Green before she left Congress had a proposal to do something like this. Um, her proposal was focusing on regular homeowners. Um, so there's already been some people kicking the can on this idea. However, any proposal that's going to make any difference has to include investors. You have to include investors in this. There's around 20 million investor owned homes in the US, ranges from 18 to 24 million depending on the data. Many of them have crazy high appreciation. We want them selling. And I think, you know, let's get over this idea of like, oh, we're going to tax break to wealthy people. It's like, do we want them holding real estate or do we want them selling real estate? what's better. >> And in some ways, you know, the government created this. I'm not going to blame, you know, necessarily someone who bought some investment properties because interest rates were suppressed and the tax code incentivizes them to do it. They're just following the numbers, right? But I think it's beholden on the government now to recognize that this is a problem. You know, banning Wall Street investors, what the Trump administration wants to do. That's step one, right? That's step one potentially. >> Now, make them sell incentives. >> But mar but it's marginal, right? It's marginal. It's going to be certain neighborhoods really. Um, but hey, you want to actually make a big impact. Let's change the fundamental tax structure and uh the incentive system on owning residential real estate to disincentivize holding and then increase the incentive to sell. >> Well, that's really interesting, Nick. Um, and I do again I want to ask you about some of the trial balloons that have been floated here recently by the administration. real quick. Um, on this idea, I mean, I'm kind of the mindset that look, as you've said, the answer to this essentially is lower prices, right? Higher inventory, lower prices. Um, so we're going to get there. Now, we may get there over a number of years if this is sort of a slowly deflating balloon. You're coming up with a proposal to say, look, let's get there more quickly, right? Which I get and applaud. I guess my question to you is is if it happened quickly like say within a year could could we create such a negative wealth effect given how much uh real estate is owned in America that we might almost create a short-term I don't even know some sort of recession because people are like oh my god my house just lost 25% of its value over the past year because we accelerated the the the price change of the market It's always a risk. I can't say no for sure. I will say that in Austin, Texas, where values have gone down 25%, the economy hasn't crashed. The unemployment rate's around 3.6% in Austin right now, even after that 25% decline in prices. I think um a lot of owners while they are clutching to the idea of the equity, I think many deep down understand that it's not totally and fundamentally real. And what actually gives me more hope uh for downside protection, Adam, is how much equity re uh residential real estate holders already hold. So this is a graph from Fred showing homeowner equity in the US. 34 trillion in homeowner equity third quarter of 2025. It's total value of around 50 or 48 trillion, debt of around what 14. You can see that this homeowner equity is what? Oh, more than double what it was in ' 06, >> right? >> The cushion is so big that if prices dropped, let's say 20 20%. On a national basis, that would only drop the homeowner equity to 25 trillion. >> Like, it would still be >> bigger than pre- pandemic. Yeah, >> it Oh, it would still be massively bigger than pre- pandemic. I have to can't remember the exact number, but it's something like a 15% decline in prices would lead to a 20% decline in equity. What was the big problem last time is homeowner equity got cut in half almost it went down 40 to 45%. That created some of the structural problems in the economy. But if we see prices drop 15 to 20%, homeowner equity is going to still be healthfully above prepandemic levels. And I think that suggests that we're not going to see this like massive contagion effect in the financial system and economy like we saw back in 2008. There's just such a big cushion already that uh they can absorb a drop. >> Okay, that's really interesting. Well, look, I if if there are legislators who are listening to this, would love to hear your thoughts in the comment section below. And obviously, if you're somebody who's in a position to do something about this and you like Nick's idea, reach out to Nick directly and we'll tell you how to do that in just a few minutes. Um, so Nick, we haven't talked at all yet about what were to happen if the job market were to continue to really weaken or there be a recession. Um, and I'm not necessarily um, predicting one this year, but um, obviously that would just make a lot of this even worse. I mean, I don't know how you make, you know, demand at at at was it 5% or whatever, whatever your chart was where demand is basically getting pretty dangerously close to the x- axis there. Um, but it would just make that even worse. Correct. >> Yeah. You know, it's an interesting it's an interesting point. I I don't know. I I think intuitively that makes sense. I It's just hard to think demand can get even worse. I kind of showed you the index, the reventure demand index. What is it like a six or something or seven right now or five um out of a 100? Yeah, conceivably can always get worse. Um >> but that would add to the distress of the seller. I mean, it would >> that's more how I'm thinking about it. I'm thinking like a job market recession is more of a supply thing. So, I think a job market recession will cause a increase in mortgage defaults. uh will cause more distress selling. You know, during the pandemic, we saw a glimpse of this. Unemployment rate went to 13%. What happened? Mortgage default rate went to nine, almost as high as it was in 2008. Now, we didn't see foreclosures happen in the pandemic through those mortgage defaults because they blocked the foreclosures. But historically, the mortgage default rate and seller distress is very correlated to the unemployment rate. So, the unemployment rate were to go to 6 or 7%. we'd probably see more mortgage defaults, more distress, selling, more short sales, more foreclosures, like I showed you before. I think it's more a supply story than a demand story. I I actually wouldn't be surprised if some demand steps in uh in in that situation. But I think the big thing would be more inventory, lower prices. >> Yeah, I I guess the way I should have asked the question is is uh weakness in the job market would make uh the gravitational forces that are pulling downwards even more strong. Sounds like you think yes. >> Yes. >> Yeah. Okay. Um, last question and we'll wrap it up here. So, as I alluded to, you know, the president has said he wants to do whatever he can to help the housing market, um, both buyers and owners. Um, this year, and obviously, I think this is just, you know, Trump doing whatever he can, throwing everything at the wall just to try to not lose Congress in the midterm elections. They floated the trial balloon. So they they they they banned um institutions from buying single family homes, which I'm a huge supporter of um and have been talking about forever. And clearly that had a lot of popular um uh appeal. I hear your point. Ah, it's it's not that big of a deal, at least in the near term. Um they then floated the idea of 50-year mortgages, which I think they got enough blowback on that hopefully they're not going to do that. I personally don't like that idea. Um, but then Trump and I I I don't I don't think he provided any specifics on this. Uh, I could be wrong though, but he said, "Okay, I want to make sure that, you know, we help new home buyers and help them get into a home more cheaply, but we want to do it in a way that doesn't impact the prices and home equity of existing homeowners." I don't know how you square that circle, Nick. So, anyways, I'm just curious, what what thoughts do you have on what you're hearing from the administration right now? And will it make any difference or is it just political hot air at this point? Yeah, I think maybe some of it might make a difference on the margins. Uh, you know, uh, that comment that Trump had about not wanting to lower home equity, but wanting to somehow lower the cost for buyers is interesting. I think it's a bit of a fairy tale. You know, um, I I just kind of look at less about what they say and more what what the Trump administration's actually done. >> What have they actually done? Well, they reduced some of those uh they took away some of those foreclosure moratoriums and uh the foreclosure forbearance. Um they actually did that. That's leading to more foreclosures like some of the ones I'm showing you in this video, pushing down prices in some markets. Uh they've heavily restricted immigration. Now, that's a very controversial topic socially, but just from a housing market standpoint, what's that doing? Slowering rental demand, lowering rents. uh they uh took away the ability for H-1B visa holders to use governmentbacked mortgages to buy houses. Previously, if you're on an H-1B visa, non-permanmanent resident, you could actually use a taxpayerbacked mortgage to buy a house. They took that away. That's reduced demand, especially in markets like Dallas and Austin, cause inventory to go up. I look at what they've actually done and it's things that are deflationary for the housing market and improving affordability. That's what they've done so far. We'll see what they do in 2026. Uh they're throwing a lot of ideas out there, but so far what they've done has marginally improved affordability. >> Okay. And I guess let's say they come up with something. Let's say in two months they come up with a big new program. Is there really time for it to make a difference in the housing market before the November elections? I I think if they institute a capital gains tax holiday starting in July or August, that would have a big impact. Um, you know, I think that that's the fastest way. Uh, if you do this thing that would also be like a news story, right? That would also be kind of get people excited. Some people would hate it, other people would love it. Be controversial. People would talk about the housing market, but then it would just, you know, cause a lot of sellers to come to market. I think that's probably the fastest way. uh if these things that are about like you know buying mortgage bonds lowering mortgage rates by 10 basis points like that's not going to do anything really in the short term or the long term. So >> okay >> uh I think there's there's a small there's a small list of things they could do to make a difference by the midterms but u yeah time is running out. >> All right. All right. Well, look, um, if I took good notes here, um, Reenture expects, um, continued weakness in the national housing market this year on average. You, I think you heard you say you might even, um, write that down a little bit more once you've done some additional analysis. Um, I do not detect uh, much of a sense of optimism here in the near term. Um, at least if if you care about maintaining today's home prices. Um, I believe, Nick, and don't me put words in your mouth. Um, but you actually think not only will no lower prices kind of be the inevitable result of the current market conditions, but that you think that's a healthy thing that it will bring the market hopefully back into better balance and we'll have a more sustainable housing market where more people can afford it and young families can get into homes to, you know, uh, build families and all that stuff. We can kind of get back to hopefully where we were six, seven plus years ago. Um, I I guess first let me take a beat. Am am I capturing this correctly so far? Is there a bigger message you want to deliver for folks as we wrap up here? >> Yeah, I think you nailed it, Adam. I mean, lower prices is a great thing. Lower prices is what's going to deliver uh rejuvenation to the economy and housing market. It's going to help society at large. It's going to increase family formation. Um it's going to allow more people to participate in long-term generational wealth building. Only happens through lower prices. we if we don't get lower prices, we're going to just stay in this abysmal demand market for potentially another five years. Uh where no one is really winning and frustration in society just continues to increase. Um but I I'd like to show you and your viewers kind of this what the success story looks like, right? Um and how we're measuring, you know, potentially when it might be a good time to buy. And uh this is Reventure App, the program I developed to help home buyers and investors. We're looking at a metric called overvaluation rate. And immediately what you could see is almost every area is overvalued here in red in the US h housing market. But I want to key in on Austin for a second. In Austin, we were in December 2021 at 39% overvalued on home prices relative to income. Today we're 2.7% overvalued. So home prices in Austin have dropped 25%. Incomes have kept going up. So, we are now almost at preandemic fair valuation levels. This is what you want to see if you're a buyer, right? And if you're someone trying to figure out like, have prices dropped in my market? How much more do they need to drop before it makes sense? This overvaluation chart is going to really help you to do it. And we're probably going to be giving a buy signal on Austin in the next 3 to 6 months. If the current trend hold, our price forecast is minus 5.2% 2% for the next 12 months. So you look at that price forecast, you know, it's still a downward market. Best month to buy is September. Best month to sell is March. Kind of a consistent trend in a lot of different cities. Uh springtime is better to be a seller. Full-time is better to be a buyer. But you look at that price forecast in conjunction with this overvaluation rate, you start saying, "Hey, we're starting to get to the point where it makes sense." Now, not all areas are like this. You know, if I go to Nashville, prices are 19% overvalued in Nashville. They're 29% overvalued in Knoxville. They're 15% overvalued in Memphis. Uh Atlanta is 18% overvalued. So, we still have a lot of overvaluation here in the Southeast. Concerningly, we're starting to get a lot of overvaluation in the Midwest. >> I was going to say it's pretty much all red there. >> Detroit's now 27% overvalued, you know, and this is something to be concerned of. We still have an upward price forecast in Detroit because the inventory statistics and price cuts are saying that values are still going to go up. But you got to start watching Buffalo, New York 29% overvalued. Syracuse 27% overvalued. A lot of Wisconsin areas are now getting close to 30% overvalued. So this is what I was talking about earlier where I'm starting to get a little concerned with the valuation figures here in the Northeast and Midwest. Also, we head out to the West Coast. big overvaluation figures here on the West Coast. You know, in Boisee, Idaho, 23% overvalued. >> Wow. >> Uh yeah. Yeah. We go to Montana, we have big overvaluation levels in Montana. We head down to Utah. Big overvaluation levels in Utah. Um big valuation overvaluation in Arizona. Interestingly, Prescott Valley is undervalued, but most areas are overvalued. Riverside, California. So, I I one thing I'm I want your viewers to watch out for is I think the declines that have really been in this belt over the last year here in blue and we're seeing it like also in Denver and Phoenix. I think they're going to kind of spread more here in the mountain in 2026 just based on what we're seeing with the early indicators. I think we're going to see more of these declines hit here and I think maybe a year from now this whole section will be blue. will be blue. >> Yeah. >> Well, as someone who lives in that section and is waiting, uh, I hope you're right. Hope it'll mean more more attractive entry points for folks like me. If you're a homeowner here, sorry, folks. >> Um, >> yeah, Reno Reno is flat, down 2% year-over-year. Not not much of a change, but uh, >> but I don't know what it was before, but maybe it is just recently tipped in the blue there, so maybe it'll darker darken as time goes on. >> Yeah. You also see Northern California is starting to uh >> starting to look pretty blue as well, >> which obviously will have an impact, right? This will have an impact on here, right? If Northern California continues to drop, that will flow in to the nearby areas >> areas. Yeah. And that's an interesting way to think about it. So, uh, again, I just I know I've said this many times, Nick, but, uh, that Reventure app that you've built is just a ferociously valuable tool for somebody who's interested in tracking the housing market. Um, we didn't use it as much today as we have at some points in the past, but folks, you you've already gotten a glimpse, if this is your first time seeing Nick, uh, of some of the things the tool does, but I'm telling you, he we've just scratched the tip of the iceberg there. Um, Nick, for folks that would like to um check out the Reventure app, where should they go? >> Yeah, so uh we actually just added a mobile application in the iOS and Android app stores. So, that's a great way to get started. You could download the app for free. In the iOS and Android app stores, you can use some of the basic features under a free account and then to upgrade to see our price forecast and valuation rates is $39 a month. Additionally, you can go to ww.reventure.app app and use the web application on your computer, which I've been using in this video. Uh, so those are the two best ways to get started, iOS and Android mobile app, and then also go to the website. >> All right. Very cool to hear that the the mobile app is now out. I know you've been working on that for a while. Um, and for folks who would like to follow just you and your work, you and your commentary in between now and the next time you come on this channel, Nick, where should they go? >> Yeah, it's uh Revententure Consulting on YouTube is the main way that you can keep track of what I'm doing. I do shorts and reels every day, a couple long videos every week, uh, touring around the US housing market. >> All right. Um, Nick's channel is an amazing channel, folks. If you're, you know, if you're you're keen on keeping track of the housing market. Nick, as usual, when I edit this, I'll put up the URLs uh to those resources on the screen so folks know where to go. Folks, the links will be in the description below this video, too, so you can get there with one click. All right. All right. Well, look, in wrapping up here, folks, please thank Nick for being so generous with his uh his knowledge and his insights and his Reventure Rap data here uh during this interview. So, please let him know that by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. And uh two things. One, um you know what to do with your house. Uh whether to consider buying a new house or consider listing your house. It's a big financial decision for many folks. If you want to get some help from that from a good professional financial adviser, if you don't have one already advising you, feel free to talk to one of the ones that thoughtful money endorses. These are the firms you see with me on this channel every week. Uh to schedule a free discussion with them. Just fill out the very short form at thoughtfulmoney.com and the firms will be in touch with you very shortly after that. Only takes you a couple seconds to fill out the form. There's no uh price. Uh there's no cost to these discussions. They're totally free and there's no commitments involved. just a service they offer to be as helpful to as many people as possible. And a quick reminder that the Thoughtful Money Spring online conference is coming up um next month. It's just weeks away at this point. Again, it's going to be Saturday, March 21st. Don't worry if you can't watch live. Everybody who registers is going to be sent replay videos of the entire event, all the presentations, all the live Q&A within just a couple of hours after the event's conclusion. It is a phenomenal uh faculty this year. Uh again, just off the top of my head, Lacy Hunt will kick it off with his usual chart packed graduate level keynote. We'll have first timers Ed Dow, uh Michael Oliver, uh and Matt Taibbe, the famous journalist there. We'll have uh Judy Shelton, Danielle D. Martino Booth. We'll have Luke Growman. We'll have Brent Johnson. Uh we will have uh Michael How and Darius Dale. We'll have Grant Williams, we'll have Stephanie Pomboy, we'll have Rick Rule, we'll have David Haye, we'll have uh Melanie Wright. Uh so, as you can see, it's just going to be a powerp packed uh brain trust there. Uh so, to go get your ticket, which I highly recommend you get now, so you get it at our lowest early bird price, uh just go to thoughtfulmoney.com/conference. And if you are a um premium subscriber to our Substack, check your email. you'll have a discount code for me you can use to get an additional $50 off of that price. Um Nick buddy, it's always uh so educational, so informative, and just a lot of fun to have you back on the channel here. Let's do this again in Q2 so you can give us an update on where things are. Um obviously if something happens in the housing market that really changes the game in a material way, let's call an audible and have you come back on here and address the audience, too. >> Sure, I'll be glad to, Adam. Thank you for having me on. Thanks so much for coming on, buddy. Everybody else, thanks so much for watching.