This Housing Collapse Is WAY Worse Than 2008 — And They’re Hiding It

In 2009, after a historic housing market collapse, the median home price in the US fell to a reasonable $208,400. But since then, prices have more than doubled. We now have the lowest home affordability since 1984, even worse than at the peak of the 2006 housing bubble. In 2024, the median US home price hit $420,000, an all-time high, while real wages stayed flat for the fifth year straight. In over 99% of US counties, the average home is now officially classified as unaffordable for the median worker. In 1985, the typical first-time buyer needed just 5 years to save a 20% down payment. Today, that number is 13.5 years. That's the longest timeline ever recorded. The average mortgage payment has jumped 113% just since 2020, and that is the fastest affordability collapse in American history. Boomers are sitting on roughly $12 trillion in home equity. Most of it though is locked behind sub-3% mortgages that they're never going to give up. Institutional investors like BlackRock and Invitation Homes have spent over 60 billion dollars quietly hoovering up homes the public never even saw listed. For the first time in US history, the majority of adults under 40 believe they will never own a home. And here's the part no one wants to say out loud. This isn't a collapse of prices. It's a collapse of opportunity. A society where 70% of future adults will never own property is not a stable society. When people don't own anything, they don't feel invested in anything because they're not. And when they don't feel that they're invested, when quite frankly they aren't invested, they walk away or they just burn it all down. This isn't a housing bubble that's going to pop that you can take advantage of. It's a financial chokehold created by money printing, policy failure, boomer era incentives, and corporate consolidation. And it's already causing problems, just not in the way that most people think. This is worse than 2008, but for those paying attention, there's always going to be a way to make the situation work to your advantage, even if we can't help everyone. We're going to cover that in part three, but if you don't understand part one, you're not going to do what's necessary. And if you want to know who to blame, I've got you covered in part two. So, welcome to part one. What the hell happened, and how did housing kill the American dream? Home building has fallen 39% since the 1970s, [music] even though America added over 130 million people. Single-family housing construction is down so badly that the US is short an estimated 3.2 million homes, and that number is growing every year. Private equity firms now own one of every six single-family homes in many major cities. Due to 15 years of near-zero interest rates, the older people who were already able to afford a home locked in a historically low interest rate and multiplied their wealth through appreciation due to inflation, while young people have simply gotten priced out. And to make matters worse, we now have the fewest homes for sale per capita in all of recorded US history. In the '70s and '80s, your parents bought a home for roughly two to three times their annual income. Today, it's roughly double that for most young people, putting homes entirely out of reach for all but the wealthiest few. The formula that originally built the middle class, the very American dream, get a job, buy a house, build equity, not only stopped working, it just outright died. Most people still think the housing crisis is just the natural outcome of supply and demand, but it is not. It is the outcome of decades of policies, incentives, and political cowardice that slowly, and then suddenly, turned the most important asset in America into a scarcity machine. To understand how the dream collapsed, you have to understand the sequence. The era of cheap money, the obsession with housing as an investment, the zoning laws that choke supply, the globalization that stalled wages, and the corporate takeover that ultimately finished the job. Let's look at the details. For more than 100 years, the path to the middle class was remarkably straightforward. You went to school, you got a job, you bought a house, and if you saved your pennies, your life improved year after year. If you passed on your house, or at least some shackles when you died, odds were in the end your kids were going to be even better off than you were. That upward trajectory was baked into the very structure of the economy. Real wages were going up, our debt was reasonable, entitlements were manageable, and America was taking advantage of its status as the world's manufacturing hub after World War II. But little did we know, a fuse had been lit in 1913 when the government created a central bank, giving it the ability to counterfeit its own money through a process called money printing. And that changed everything. And as more and more money was printed, owning a home went from a bonus to compulsory. For a while, that was absolutely fine because people intuitively understand a house as an asset. You can live in it, raise your kids in it, and it protects you from the weather and inflation. No one needed a financial advisor to explain a house to them. As debt and money printing started getting used as a cure-all, however, we were forced to break the final tether to gold in 1971, which opened up Pandora's Box, and you are still suffering from this in ways that most people do not understand to this day, and we absolutely went hog wild with money printing after the dot-com bubble burst and the 2008 financial collapse. We printed so much money that inflation started to just outright destroy everyone's savings. But in a weird twist of fate, it also helped drive housing prices sky-high. In fact, this is exactly how we ended up in the 2008 housing bubble in the first place. Fixing the dot-com bubble bursting with printed money and low interest rates just caused a new bubble to form, this time in housing. And when that popped in 2008, the government once again printed even more money. And then COVID happened. Oh lord, did we ever print when that came around. And as always happens when you print money, prices for even everyday goods just skyrocketed. Now, for now, just know this. Printing money causes inflation. Inflation causes prices to rise. To keep up, you either need to get a raise every year that's at least as big as inflation, or you need to own assets that go up at least as much as inflation. But the bad news is, globalism makes it impossible for you to get a sufficient raise. Real wages have been flat for roughly four decades. So, that only leaves owning assets. Now, as a matter of economic physics, the right basket of assets will keep up with inflation, or if you're really good, outpace it. But the top 10% of Americans own 93% of the assets. Given that homes are the one asset people understand intuitively, that's what got purchased by the few people that could still afford them after the crash. Even though money and houses were cheap, virtually no one could get a loan after the catastrophe of the subprime mortgages. No one that is, except corporations and wealthy boomers. And to [music] make matters even worse, boomers had been voting for years to make it nearly impossible to build new homes. Once people understood that their homes weren't just places to live, they were places to store wealth, they wanted that wealth to grow, understandably. So, they started voting for anything that would drive property values up. Zoning restrictions, density limits, lengthy permit processes, neighborhood opposition to new construction. None of it was malicious. It was all just simple self-interest. When supply is restricted, prices rise. And for existing homeowners, that is awesome. But the consequences are predictable. The fewer homes you allow to be built, the more expensive existing homes become. And gradually, the next generation just gets priced out. And by the time COVID hit, we'd already had over a decade of cheap ass money, artificially limited housing supply, massive immigration, and an influx of corporations such as BlackRock deploying billions of dollars to buy up single-family homes as an investment. Now, you put all of that together and you've got [music] four forces pushing homes out of reach of the average American. Wage stagnation, immigration, inflation, and increased competition from deep-pocketed corporations for a very [music] scarce resource. Now, in theory, younger generations could have compensated for housing being out of reach by mastering the financial markets. This is exactly why crypto hits so hard for young people, but overall financial literacy is rare, [music] investing can be risky, and more importantly, you can't live inside of a Bitcoin or a stock portfolio. And that brings us to the macro framework that explains everything that's happening now with assets going to the moon. When the government prints money, asset prices inflate. Housing is the default hedge against that inflation. If supply is artificially restricted, prices [music] rise faster. When interest rates stay near zero for more than a decade, homeowners refinance into ultra-low mortgages and have no incentive to ever sell. That locks inventory in place, making housing even more scarce. When immigrants start competing and large corporations enter the market and acquire homes in bulk, overall competition skyrockets and supply drops even further compared [music] to the demand. Each factor compounds upon the others. This is why high prices are not always the signal of market strength. They can also be a signal of a system malfunctioning exactly as it's [music] designed to. And yes, I said malfunctioning as it's designed to. What we're seeing is the outcome of cheap money, bad housing policy that makes it hard to build, structural wage stagnation, and concentrated ownership converging into a single crisis, a rogue wave of unaffordability. And that crisis isn't fading, it is accelerating because the government is still printing money in obscene amounts and the average American can't afford the house that would otherwise protect them from the devastating impact of inflation. So, they just fall farther and farther behind economically. The crazy thing is, we are having a housing boom, but for the young, it feels like a collapse. And that's why it's time to talk about the very uncomfortable question, was this all an accident or is there someone to blame? We will return to the show in just a moment, but first, let's talk about who you're trusting with your security. Your phone carrier was built by telecom executives, [music] people whose expertise is connectivity, not security. AT&T, Verizon, T-Mobile, they were designed to move data, not protect it. And as somebody who has had his phone hacked, it is not fun. Breaches [music] are going to keep happening because of this setup. The people building carrier infrastructure >> [music] >> don't think like hackers. Cape is different. It was founded by experts in cybersecurity and national security. OpenAI vetted them. The co-founder of CrowdStrike vetted them. These are the people who protect the most valuable targets in the world. Cape owns its own mobile core, giving them full control over data collection and authentication. Head to cape.co/impact [music] and use code impact to get 33% off your first 6 [music] months with Cape. And now, let's get safely back to the show. Welcome to part two. How bad is it and who's to blame? Housing affordability today is worse than at the peak of the 2006 bubble. Americans under 40 believe they are more likely to become millionaires via crypto or gambling than by owning a home. People over the age of 70 are now over 70% wealthier than the same age group just 40 years ago. Conversely, people under 40 are 24% less wealthy than the same age group just 40 years ago. Older Americans now hold 52% of all US real estate wealth, more than every younger generation combined. Institutional investors have spent over $60 billion buying homes that the public is never going to have a shot at. Zoning laws passed in the 1970s still block 75% of all potential new housing in major cities. If you trace the collapse of affordability back to its roots, you find that it wasn't caused by a single villain or a single event. It was created by a long chain of decisions made by people who believed they were protecting their own self-interest. The problem is that each of those decisions, when taken together, created a system that relentlessly punishes anyone who wasn't already inside of it. [music] And like all systems, once the incentives harden, the outcomes became predictable. There are three specific groups worth looking at if you're trying to find out who's to blame. And the first one really is best understood as a villain, if not by intention, certainly by incentives. Politicians. To understand politicians, you must first understand one immutable truth of the political class. They will do and say whatever is necessary to gain and retain power. To that end, for decades, politicians at every level, local, state, and federal, made decisions that directly restricted housing supply. It's what the voters wanted. Restricting housing supply makes the prices go up, and that's exactly what every homeowner wants and every would-be buyer fears. As such, local zoning boards made it nearly impossible to build anything other than single-family homes on large lots. Neighborhood groups fought density, fought multi-family construction, fought height increases, fought anything that would add more supply to the market. And I can't blame them. People buy assets specifically because they want the price to go up. And if they can take steps to make the price go up, they're going to do it. From home repairs to zoning changes, they'll do it all. Politicians understood that helping people economically is basically the whole game. So, they eagerly jumped into the fray. They'll frame it as things like protecting neighborhood character, but in reality, the goal is, was, and always will be to protect property values so they can get reelected. And the easiest way to do that is to make houses scarce. And because homeowners vote at much higher rate than renters, politicians catered to their demands without hesitation. Remember, [music] the game is to gain and retain power. No one ever got elected or reelected by telling the voting public that they're just going to have to suck it up and accept that their house may not go up in value, or at least not very quickly, >> [music] >> or that entitlements are going to have to be cut, or that we have to balance the budget, or their favorite program is going to get cut, or even that their bank is going to fail. Sure as hell not going to do that one. And so, anytime they need to get elected again, they promise free stuff. But free stuff is, of course, never free. >> [music] >> And so, they have to print money to pay for the unbalanced budget, and that makes prices go up. I really cannot bang this drum hard enough. If politicians won't do the hard thing and balance the budget, America is guaranteed to go bankrupt as every empire before us ever has done [music] for the same exact reason, debt and money printing. It is almost funny how consistently that's how empires fail. And yet, I feel like I can't get people to listen to this. It is wild. Politicians never should have created a central bank. They shouldn't have betrayed capitalism at every turn and then blame capitalism for the problems of government intervention. Politicians may not have set out to intentionally break the housing market, but that was the end result nonetheless. By creating structural scarcity, they have guaranteed that future generations would eventually get priced out. And now, those chickens have come home to roost. Politicians need to start thinking long-term and audit the data. In places like Houston, for instance, by allowing builders to build and the free market to work its magic, home prices have remained incredibly stable. And while prices [music] have rocketed upward in recent years across the country, Houston remains a shining example of what it looks like to leave the free market alone and let buyers take advantage of increased supply. Right, group two, the boomers. The next group in the villain stack is the generation that benefited most from those political decisions. You shouldn't view them as bad people or be hostile to them. I imagine for a lot of you, these are your parents or your grandparents. And like everyone ever, they are worthy of love and they are simply looking out for their best interests. We all do it. But despite that, they are the ones that voted for the policies that are now making it impossible for young people to own a home. It is super important to acknowledge the role their incentives played in shaping today's landscape so we can start unwinding some of this. Boomers bought their homes when they were cheap, when wages were actually rising, when mortgages were affordable, and when the government was still reasonably fiscally responsible. Those days are over. Then, they spent decades voting for policies that ensured their largest asset would continue to appreciate. All very understandable. Then a series of extremely unfortunate events caused the Fed to lower rates and print a ton of money. These were all self-inflicted wounds, but nonetheless, it's what happened. And that gave them the further ability to lock [music] in insanely low mortgage rates giving boomers yet another economic advantage. Again, not because they're malicious, but they were born at the right time. Boomers are not going to be moving or downsizing and thus they're putting properties back on the market. They're just holding and because so much of the country's housing inventory is now trapped behind these ultra-low mortgages, young buyers are forced to compete for a shrinking pool of available homes at a time where interest rates are much higher. Then there's the inheritance cliff. A massive share of US housing is now held by people over 65 [music] and much of it will eventually transfer to their children. Almost all of them are already in the upper half of the wealth distribution. That means the next wave of home ownership will disproportionately benefit the kids of homeowners while everyone else is going to get left even more behind and the wealth gap just calcifies. Mobility itself stalls and the system begins to resemble a caste structure, not a meritocracy. For the [music] record, I want to be very clear. We should all abhor the idea of a death tax for the very same reason that people are rightly mortified to their core by redlining, namely because it made it impossible for black Americans to amass wealth in a home and pass it on to their children. We should want any and all families that are good at saving to be able to pass that wealth on to their children. This doesn't create dynasties, but it does interrupt the cycle of poverty for at least one or two generations. As the data shows the vast majority of the wealthiest families from 100 years ago are no longer wealthy now. And that's [music] perfectly fine. Honestly, that's as it should be, but there is no reason for the government to disincentivize saving by promising people if they don't spend it before they die, the government's going to take it away. But having said all of that if you keep bailing out people who make bad decisions, you never let meritocracy automatically and justly in my opinion redistribute wealth and that's what we should want. Decision-making, [music] meritocracy to be the thing that redistributes wealth. People should have the ability to win the game by playing it well. And they should have the ability to lose the game when they play it poorly. If you don't allow for that, if you don't allow companies to go bankrupt, people to go bankrupt, [music] banks to fail, all of that, you end up with what we have right now, a static caste system where it is increasingly difficult to move up or down. Now, it bears repeating. None of this has happened because boomers are bad people or they are malicious. It has happened because like everyone else, they have optimized for their own safety and prosperity. But in doing so, they have unintentionally helped to lock younger generations out of the very mechanism that created their own wealth, right? The third group Wall Street and institutional buyers. Institutional investors entered the single-family market with billions of dollars in capital armed with algorithms that could evaluate homes faster than any human and could outbid any family. The firms that I've mentioned were not buying a few houses here and there. Their MO was to buy up entire neighborhoods. They look at homes as a financial product, not as a place to live and raise a family. For them, the math is simple. Inflation drives rents and asset prices up and given historically low interest rates the cost of leverage was too low to pass up and because all of this scarcity-promoting regulations, they were basically guaranteed long-term price appreciation. Everything that makes the housing market hell for young families makes it an absolute goldmine for institutional investors. They're not hurt by high prices. They're fueled by them. Once Wall Street realized single-family homes could generate reliable cash flow, secure long-term appreciation and be packaged into securities homes became the newest institutional asset class. In that instant, single-family homes stopped being just a shelter from the storm and started being a shelter from inflation and taxes. Neighborhoods stopped being communities and became rental portfolios. And because these firms could pay in cash nearly instantly [music] and absorb temporary losses, they were able to outcompete ordinary buyers every [music] turn. By the time most people realized what was happening institutions had already entrenched themselves. >> [music] >> Their presence permanently altered the market by increasing demand for a product that was already scarce >> [music] >> and decreasing the number of homes available for purchase. The result is a market where young families aren't just competing with each other, they're competing with trillion-dollar balance sheets. Now, it is tempting to point to any one of these three groups and declare them the ultimate culprit. Politicians restricted supply and massively inflated prices through deficit spending. Boomers locked up inventory and voted for policies that made themselves richer while icing everybody else out. >> [music] >> And corporations devoured what was left. But you have to take all of them together to understand what's actually going on. It's not a conspiracy. It's just simple incentives. Maybe they're bad ones, but they're incentives nonetheless and over time they just stack up to create the moment that we're living in now. The unavoidable truth is this. If you own assets, you're loving life right now. 2025 was awesome. But if you don't it is a bloodbath. That's the real story of the housing crisis. It's not a market failure. It's a policy success just for a limited number of people. The policy goal moving forward needs to be to focus on policies that allow the middle class to come roaring back. And the surest way to do that is to stop protecting people and companies from failing. >> [music] >> Let creative destruction happen. Let entrepreneurs build as many houses as the market will bear. All of that is going to drive costs down and make homeownership accessible for far more people. The middle class is the goal, a thriving middle class. But I find yelling into the void about policy is a way less effective than talking about the things that each of you guys can do at the level of the individual. So what I want to do now is go through what you can do right now to take advantage of how things are rather than wishing or even evangelizing to change them. [music] Stay with me because what I'm about to tell you affects every single person listening right [music] now. There is a billion-dollar industry profiting off of your personal data and you're the only one that isn't getting paid. Data brokers are legally harvesting your information, your home address, your email, your phone number, even your social security number and flipping it for cash. Scammers use it to steal identities, criminals use it to commit fraud, stalkers even use it to find victims. That's where Incogni comes in. Incogni finds where your data is exposed across hundreds of data broker sites and removes it automatically. You give them permission, they go to work. No phone calls, no forms, no stress, just real results. So if you're serious about privacy, take action right now. Go to incogni.com/impact and use code impact to get 60% [music] off your annual plan. Risk-free for 30 days. And now, let's get back to the show. So welcome to part three. How to make this mess work for you. Homeowners currently hold over 32 trillion dollars in home equity. That's more than the GDP of the US and China combined and that wealth is expected to grow dramatically over the next 20 years. Historically, in every 20-year period for roughly the last 100 years of American history homeowners have built approximately 30 to 40 times more wealth than renters, even during recessions and crashes. People who managed to buy during the last affordability crisis later saw home values rise more than 700% over the next roughly 40 years. Markets with the worst affordability today have historically delivered the highest long-term returns to buyers who entered during the quote-unquote impossible years because scarcity becomes your tailwind. If you buy even a modest property during an affordability crisis, historically the odds of doubling your equity within 10 years has been over 90%. Land has outperformed both inflation and wage growth for over 120 years, meaning even small ownership positions historically snowball into meaningful wealth. The point is very simple. The system is designed to make it hard for new people to get in and for outsiders to get soaked by inflation. I really wish that weren't so, but it is. So you need to find a path to asset ownership. It does not need to be a house, but for reasons I'll explain, if it matches your lifestyle and you can swing it, a house is a very reasonable thing to aim for. Let's walk through some possible ways to do that. Step one, start thinking like a capital allocator instead of a renter or even a homeowner. Most people ask something like, "Can I afford this monthly payment?" Capital allocators on the other hand think in terms of, "Is my money outrunning inflation or getting eaten alive by it?" Inflation is an invisible tax that no one votes for, which means you can't stop it. If it runs at 3% a year, your cash loses about half of its purchasing power in 24 years. If it runs hotter, as it recently has, that timeline can speed up dramatically. Cash sitting in a savings account is not safe. That is the melting ice cube getting hammered by inflation. The right assets can keep pace with inflation. That's true of housing, stocks, land, gold, Bitcoin, art, and much more. They each have different risk profiles to be sure, but they all share one key trait. They're not standing still while your currency gets debased by inflation. It is very important to note that you do not have to buy a house to protect yourself from inflation. It's not even necessarily the best way. A wide, sensible basket of uncorrelated assets is objectively one of the smartest ways to approach a hyper-uncertain future. The reason I keep coming back to housing is not because it's the only answer. It's because it's the only asset class most people intuitively understand. You can live in it. If you're married, odds are that your wife wants one. You can raise kids in it. You can fix it up. You don't have to stare at a candlestick chart to know what's going on. So, if you can afford to buy a reasonable home, you are essentially setting up a force savings account that over time tends to move with or ahead of inflation, while rent-paying neighbors get absolutely demolished by every price increase. And maybe the most important part, if you're married or plan to have a family, you're creating memories inside of an inflation-resistant asset. There is nothing else in the land of assets that has that combination. Are there risks? Of course. Mortgages are sensitive to interest rates. If you lock in at a high rate, the payment can feel suffocating. But, if rates drop, you will at least have the option to try and refinance. If rates go even higher, you're just going to be glad that you locked in the rate when you did. Now, you might get better returns elsewhere. There's no doubt about that. But, you can't live inside of a Bitcoin or a 401k. Step two, get into entry-level assets. The goal of your first move isn't to buy your dream home. The goal of your first move is to get into ownership and protect that money from inflation. Waiting until you can afford the perfect place in the perfect neighborhood with the perfect kitchen is exactly how you wake up 45 years old having watched the entire run-up from the sidelines. House hacking is one of the most powerful tools on the table. That could mean buying a duplex, a triplex, or a fourplex, living in one unit and renting out the others. It could mean buying a normal house and renting rooms, the basement, or an ADU. Is it glamorous? No, it is not. Does it radically change the math of your mortgage? Yes, that it does. If prices are insane where you live, you don't have to go it alone. You can co-buy a place with someone you trust, a sibling, a friend, a business partner, whatever. Treat it like what it is, a small business. Put the expectations in writing. Who lives there? Who has what rooms? Who pays what? How do you exit? In a tough market, you've got to be willing to do deals if you want a result that most people just can't get. If even that's out of reach, scale down the unit size, not your ambition. Try fractional ownership or a small position in a solid, well-vetted REIT. They're decent entry points. You can't live in them, but they get you into assets, expose you to the housing market, and may help you make better decisions when you're ready to buy a place of your own. If you're more advanced, you might also want to consider land. Now, land is essentially a long-dated call option on the future. It may not cash flow today, but if the area does wake up and people start flooding in, that asymmetric upside can be worth a lot of money. But, this is very speculative, so be very careful. Step three, get into position for distressed opportunities. Every cycle has moments where the crowd panics. Credit tightens, headlines scream, people who stretched too far get forced to sell. Regions that were untouchable suddenly correct 20, 30, 40%. It has happened many times before, and we will see it again. And in that moment, whoever has the ability to buy is going to be the one that walks away with massive upside. You never know when this is actually going to happen though, so make sure you take the time now to figure out in advance what a real deal looks like for you. What markets are you interested in? What price range? What kind of condition? The more you know ahead of time, the more likely you're going to be to recognize a deal when you see it. Knowledge is so powerful. Step four, lobby your local politicians to end NIMBYism. NIMBYism simply stands for not in my backyard. For all the reasons we have discussed, the real goal should be policy change so that homes are more affordable, inflation is zero, yes, zero, and people can simply save their money to get ahead. That's how the world should work. I cannot believe that that's controversial. It is. It may be the most controversial thing I say in this video. But, people should just be able to save their money. But, sadly, odds of that are extremely low without there first being much more pain and suffering. So, your primary focus right now should be one through three. But, boy, oh boy, in your spare time, let your politicians know how you feel. You want more housing to be built. You want to see the middle class thrive. All right, here's the through-line in all of this. You don't control Washington. You don't control the Fed. You don't control boomers, Wall Street, or zoning boards. But, you control you. You control your own behavior. You control whether you stay in cash while inflation eats you alive or whether you start steadily accumulating assets. You do not need permission to invest, and you don't need a ton of money. You just need to know your options and get creative. You don't need perfect timing. You need clarity and an understanding of how the economy works. Money adheres to something akin to physics. The more you understand about it all, the more likely you are to be able to capitalize on opportunities and avoid being slaughtered by bad government policy. You're not going to end up financially well off by accident, I am sad to report. But, you absolutely can get there by understanding how the game is rigged. It is rigged. And how you can still play it well despite the fact that it's rigged. But, you can still play it well. I look forward to seeing you guys on the mountaintop no matter what happens next in the economy. All right, if you want to see me explore topics like this in real time, be sure to join me live Wednesdays and Fridays at 6:00 a.m. Pacific on YouTube, X, Twitch, or Kick. You can join the debate or just chill in the community. Hope to see you there. Till next time, my friends. Be legendary. Take care. Peace. If you like this conversation, check out this episode to learn more. In just 18 months, over 3.3 trillion dollars has flooded into AI-linked companies. That's more than the entire market cap of Germany. Today, five AI-adjacent companies alone represent over