Home Prices To Drop In Half From Here? | Melody Wright

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TALK TO THOUGHTFUL MONEY'S endorsed financial advisors at https://www.thoughtfulmoney.com Contagion has been the trend of the US housing market this year as rising inventory and weakening prices have spread to more and more metros. How bad has it become? Well, Zillow just revealed that it's data shows that 53% of all US homes lost value over the past 12 months, the most since 2012. As we're now poised to enter a new year, should we expect the situation to get better or worse? To make sense of it all for us, we're fortunate to welcome housing analyst Melody Wright back to the program. Follow Melody on X at @m3_melody Or on Substack at https://m3melody.substack.com #housingmarket #mortgagerates #realestate 00:00 – 53 % of U.S. homes lost value in past 12 months (Zillow data) 02:40 – 2025 prediction update: likely flat to slightly down nationally, but clear deceleration 03:36 – Market is frozen: only ultra-high-end homes are still transacting 04:17 – Bifurcated market: median price still looks high because only $1 M+ homes are moving 05:05 – Speculation (not first-time buyers) turbo-charged the boom → now becoming distress 06:36 – Airbnb/short-term rental investors are the biggest distressed sellers right now 09:19 – Institutions have quietly become net sellers (rehabbing & off-loading as leases expire) 11:00 – Short-term rental markets (Tampa, Atlanta, San Antonio) already seeing sales ↑ / prices ↓ 14:36 – FHA guardrails (Oct 1) → immediate price slashing & short sales exploding 15:56 – Mortgage rates: bond market complexity + Japan/China levers = no big relief coming 17:06 – Fed itself now admits MBS buying inflated housing → unlikely to repeat 18:00 – Even if rates fell sharply, millions can’t qualify (student loans, layoffs, underwater) 19:24 – Rocket Mortgage now pushing DSCR investor loans → clear sign of desperation 21:55 – Silver tsunami + distressed investors + boomers walking away = massive supply wave 23:03 – Municipal budget crunches → property-tax doubling (Chicago, Boston) → another ownership cost bomb 25:07 – ~50 % decline needed to realign median price with median household income 26:02 – Government likely becomes buyer of last resort (or forces BlackRock to hold the bag) 26:36 – 50-year mortgage = “debt slavery”; nothing-burger that won’t move the needle 29:02 – Portable/assumable mortgages are non-starters (collateral & servicing nightmares) 31:35 – Future affordability “solutions” will be targeted assistance programs (means-tested giveaways) 35:44 – Five years from now: natural market forces win → Great Housing Bust 3.0 38:35 – Median home-buyer age just hit all-time high of 59 41:46 – Signs of absolute desperation: multi-family Frankenstein additions, RV rentals, pad-splits 43:21 – Local “No Data Centers” signs everywhere → communities rejecting power/water grabs 47:44 – Data-center overbuild already complete in many areas (empty, for-lease shells) 50:18 – AI mania = pure narrative; we’ve already hit the limits of LLMs 53:30 – Everything bubble is cracking: AI, housing, Bitcoin — narrative busting everywhere 58:03 – “Desperate people do desperate things” — expect more ugly, creative housing hacks 1:00:30 – Final outlook: 2026 spring selling season will be “very interesting” (code for carnage) 1:06:09 – Hopeful silver lining: younger Americans will finally be able to participate again once speculation is flushed _____________________________________________ Thoughtful Money LLC is a Registered Investment Advisor Promoter. We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such. We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor registered with the U.S. Securities and Exchange Commission (SEC) or state securities regulators who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance. IMPORTANT NOTE: There are risks associated with investing in securities. Investing in stocks, bonds, exchange traded funds, mutual funds, money market funds, and other types of securities involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods. A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance. Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC. Copyright © 2025 Thoughtful Money LLC. All rights reserved.