With over six million homeowners behind on their mortgages, concern is growing over the direction of the U.S. housing market. Are we heading into another 2008-style crash, or is this just a correction in a red-hot market? To get a clearer picture, we sat down with housing market expert Randy Patrick to discuss what the data is showing, where things might be headed, and how both homeowners and investors can prepare for what's next.
When asked about the current market indicators, Randy didn’t sugarcoat it.
“We're seeing increased inventory, price reductions across various segments, and a shift toward a buyer’s market, especially in areas that were booming just a year ago.”
These trends, Randy noted, are reminiscent of the months leading up to the 2008 crash. Investors in the fix-and-flip space are feeling the squeeze, with reduced margins and lower after-repair values. Wholesalers are adapting, but the speed of change is catching many off guard.
Mortgage delinquencies are quietly rising, a trend that has largely flown under the radar in mainstream media. According to Randy, the increase suggests we're entering a new period of volatility, one that could last 3 to 4 years.
“This isn’t a sudden collapse like 2008, but it's definitely the beginning of a longer correction cycle. If we don’t learn from past mistakes, we’re bound to repeat them.”
Randy believes many of the early warning signs are already in place, especially among vulnerable borrowers.
One of the most eye-opening parts of the interview was Randy’s take on FHA loans. He believes they’ve become today’s version of subprime lending.
“We’re seeing a spike in delinquencies, especially among FHA loans originated in 2022 and 2023. Some of these buyers never should’ve been approved in the first place.”
He also pointed to aggressive low-down-payment offers, such as Rocket Mortgage’s 1% down program, as signs of risky lending behavior returning to the market.
Adding to the concern is what Randy calls a “shadow inventory” of mortgages that exited forbearance programs but remain unresolved.
While much of the discussion focused on potential risks, Randy sees a significant opportunity for investors, especially those who know where to look.
“Distressed properties are out there, but they’re not always easy to find. That’s where data tools come into play.”
Randy emphasized the importance of focusing on pre-foreclosures, reverse mortgages, and other distressed assets that are likely to hit the market as financial pressure builds.
“Lenders are rolling out programs that, quite frankly, look predatory. That’s usually a signal that the dam is about to break.”
For homeowners already struggling to make payments, Randy had clear advice:
“Short sales are almost always better than letting a property go into foreclosure. They don’t hit your credit as hard and can help you avoid a court judgment.”
He urged homeowners to consult with professionals who understand the foreclosure and short sale processes, reminding them that options are still available if they act early enough.
Randy’s outlook for the housing market is sobering, but not hopeless. He believes we’re entering a new, more volatile cycle, but with the right education and strategy, both investors and homeowners can navigate it successfully.
Learn more from Randy Patrick through his YouTube channel.
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