Morning Wire Podcast Summary
Episode: Weirdest Housing Bubble Ever: Will Your State Crash? | March 9, 2025
Hosts: John Bickley (Editor-in-Chief, The Daily Wire) & Georgia Howe
Guest: John Rubino (Financial Analyst and Author)
Introduction
In the March 9, 2025 episode of Morning Wire, hosts John Bickley and Georgia Howe delve into the complexities of what guest John Rubino terms the "weirdest housing bubble ever." With trust in mainstream media dwindling, this episode offers a distinct perspective on the current real estate landscape, highlighting unprecedented trends and regional disparities that could signal an imminent market crash.
Current State of the Housing Market
Georgia Howe opens the discussion by highlighting recent interest rate drops to their lowest since October of the previous year, which have ignited a 20% surge in mortgage applications. Despite this uptick, housing affordability remains a significant issue for many Americans.
"Interest rates dropped this week to their lowest point since October last year, sparking a 20% surge in mortgage applications."
— Georgia Howe [00:03]
John Rubino explains that while traditionally a housing bubble sees prices perpetually rising due to fear of missing out (FOMO), the current scenario is atypical. Despite sky-high prices, the market is "frozen," with home sales stagnating at levels reminiscent of the 1990s, even though the population has surged by 50 million since then.
"Normally the way a bubble works is that the price of something starts going up and it keeps on going up. But houses have become so unaffordable that the market is kind of frozen..."
— John Rubino [01:08]
Unique Characteristics of the Current Bubble
Rubino emphasizes that the median age of homebuyers has surged into the 50s, starkly contrasting with the typical early 30s buyers of the past. This shift underscores a broader trend where only individuals at the peak of their earning potential can afford homes, leaving younger generations sidelined.
"The median age of home buyers now is in the 50s. It used to be 30 or so... now the only people who can afford to buy a house are basically people who are at their peak of their lifetimes of earning."
— John Rubino [01:08]
He attributes this anomaly to inflation, which has effectively debased the currency, making houses—traditionally seen as stable financial assets—escalate in price faster than wages. This dynamic disproportionately enriches older generations who own significant financial assets, including real estate, stocks, and gold, while younger generations struggle to achieve basic homeownership.
"We have basically screwed over younger generations while enriching the already rich. And that's what inflation does, and that's why it's so insidious."
— John Rubino [01:52]
Regional Differences and Market Impact
John Bickley brings attention to the stark regional disparities within the housing market, noting that states like Florida and Texas are experiencing an overabundance of housing supply, whereas other regions continue to face shortages.
"Florida and Texas have an overabundance of supply, whereas other places have a persistent shortage."
— John Bickley [05:13]
Rubino explains that the saturation in these hot markets is a precursor to their inevitable decline. As inventory builds up without corresponding buyer demand, these regions are poised to experience significant price corrections.
"The bubble markets, the really hot markets, are the ones that break first."
— John Rubino [05:27]
The Case of Austin, Texas
Austin, Texas, is spotlighted as a leading indicator of the impending downturn. John Rubino describes Austin as "ground zero" for the housing market's decline, noting a price drop of approximately 15% from its peak.
"Austin has basically been the hottest city in the country for the past decade or so... I think it's something like 15% from the peak."
— John Rubino [07:05]
He predicts that other overheated markets will follow suit, with potential declines ranging between 30% to 50% in the next couple of years, especially in areas where home prices have become wildly unaffordable.
"In many other places where home prices are wildly unaffordable, they're going to tank... 30, 40, 50% declines are going to seem normal."
— John Rubino [07:05]
Factors Contributing to the Bubble's Uniqueness
Rubino identifies several factors that differentiate the current housing bubble from previous ones:
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Rising Ownership Costs: Beyond high mortgage rates and inflated home prices, homeowners are grappling with increased costs in insurance, maintenance, and property taxes.
"The cost of homeowners insurance is spiking and home maintenance is much more expensive than it used to be."
— John Rubino [08:17] -
Demographic Shifts: Baby boomers are downsizing from large homes, adding to the surplus inventory as they exit the housing market.
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Corporate Ownership: Entities like BlackRock and Airbnb have amassed significant numbers of single-family homes, contributing to market saturation when they begin to offload properties.
"Wall street, you take Airbnb and boomers, put them all together, and you have this massive tidal wave of homes that are going to hit the market pretty soon."
— John Rubino [09:17]
Corporate Ownership and Market Dynamics
The involvement of corporations in the housing market introduces a new variable. While not yet dominant, corporate ownership is growing, and combined with the impending downsizing of the baby boomer generation and the unraveling of short-term rental investments, it's set to exacerbate the inventory glut.
"It's a very big one. And like you said, it's a very new one... a lot of them are going to have to dumped onto the market."
— John Rubino [09:17]
Areas Insulated from Price Drops
Not all regions will experience drastic declines. Rubino points out that areas which did not experience significant booms initially are less likely to suffer severe price drops. States like Missouri and Ohio, where housing remains affordable, are relatively insulated.
"The places that didn't boom in the first place... are insulated from the worst of the housing bust because they didn't boom."
— John Rubino [10:31]
Additionally, cities benefiting from new economic activities, such as the influx of technology companies to the Phoenix area, will maintain more stable real estate prices.
Conclusion
In this insightful episode of Morning Wire, John Rubino provides a comprehensive analysis of the current housing market's precarious state. Highlighting unique factors like demographic shifts, rising ownership costs, and increased corporate ownership, Rubino cautions that a significant real estate downturn is imminent in many of today's hottest markets. For homeowners and potential buyers alike, understanding these dynamics is crucial as the housing landscape braces for what may become the most unusual and challenging bubble in recent history.
"Generally, if you've got a house now, your house will be less valuable in two or three years. And if it was wildly overpriced when you bought it, it's going to go down by a lot."
— John Rubino [10:31]
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