Name: A Once in a Lifetime Housing Crisis is Coming (Worse Than 2008)
Uploaded: 2026-03-13T18:10:23.000Z
Duration: 16 min 11 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

This is going to be the largest housing crisis in the history of the United States.

This crisis will be a lot worse than the 2008 financial crisis.

Adverbs of degree

And honestly, I did not want to make this video because this video is very scary.

And if you look at what's gonna happen to the housing market, it is going to scare most of you.

Like most people watching this video most likely will never be able to afford a house on after this crisis.

So if you are not ready for what I am about to tell you, please turn off this video because I am going to explain why housing from now onwards will be unaffordable for most people.

And it has mostly to do with the war in Iran.

Wait a second, what the war in Iran has anything to do with me buying a house?

And in this video I will explain why and why that is a really bad news for you.

So if you look at how people buy houses, there are two ways.

Either you are going to go and give them a cash or you are going to get a mortgage.

And the ratio is very clear that a third of houses, or less than a third is people buying a house with a cash.

So most people don't have enough money to buy a house.

Most people rely on banks and mortgages to be able to afford the house that they want to live in.

And if you look at mortgage rates, mortgage rates right now have come down to a little over 6% after they have reached almost 8% in 2023.

But historically speaking, mortgage rates haven't actually been low.

There was one period in the history of the United states after the 2008 financial crisis that mortgage rates were literally between 2 to 4%.

Other than that, historically mortgage rates were pretty high.

the reason that it wasn't a problem historically for the US is because in the past, house prices simply were much lower than they are today if you compare them to the average wage.

So for example, back in 1970s, around three wages or annual wages would get you a house.

So even though that interest rates back in the days have been between 7 to 10%, most people simply could actually save for a house and go and get themselves a house with a mortgage or with cash.

Then even if you would get a mortgage, you could literally just put a 50 or 70% down payment and the rest of it, you could finance it with a mortgage.

So your annual or monthly interest payments would be reasonable.

The real question is what is going to Happen to the mortgage rates.

If you can ask for this question, you can literally figure out what is going to happen to the housing market.

Now most people assume that it is the bank that is going to set their interest rate or their mortgage rate.

Mortgages are very bad investments because they are like 30 year investments.

And if you're a bank and you're offering a mortgage, you don't want to lock your money for the next 30 years because God knows what is going to happen.

Imagine 30 years ago, could you possibly predict that there is going to be an entire Iran war and there is going to be a huge oil crisis?

So because these are 30 year mortgages and 30 year loans, banks don't often want to lock their money for that long.

This is you, you will go to the bank and get a mortgage.

But the way they set their mortgage rate is by turning your mortgages into a security that we call a mortgage backed security.

And this security will be sold to investors.

So demand and supply for the mortgage backed security by investors is going to determine the mortgage rates for you.

So let's say investors really want to buy these mortgage backed securities and there is a huge demand for them.

Banks can confidently offer you a lower mortgage because they know that this mortgage backed security can be easily sold to these investors.

Now imagine the opposite scenario where these investors don't want to buy the mortgage backed securities.

Do you think the bank is going to offer you a lower mortgage?

So if we want to figure out what is going to be your mortgage rate, then we have to understand what is the demand by investors for the mortgage backed securities.

And there are three main factors that influence investors decision.

So the higher the inflation is going to be, the higher the return I'm expecting as an investor.

Put yourself in the shoes of an investor.

If the dollar is losing 3% of its value because inflation is 3%, what return are you expecting from your investment?

And even if you're going to get 3%, you're not making any money or whatsoever because the dollars are losing 3% of their value.

So you're expecting a return that is going to be higher than 3%.

So the first factor that determines your mortgage rate is inflation.

Any kind of investment carries with itself a reward and a Risk.

If it's a very risky investment, where my chances to lose my money is extremely high, then I'm expecting a very high return.

But if it's a very safe investment, for example, when I'm loaning my money to the US government that prints the US dollar, then risks are extremely which is why I can expect a very lower return.

So the question you should be asking yourself is that what kind of a security and how much are the risks for the mortgage backed securities are?

Well, they are very safe, but not extremely safe.

Because we know from the 2008 financial crisis that the housing market can collapse and my mortgage backed security will be a very bad investment.

This already happened once in the history of the United States in 2008 financial crisis.

So essentially mortgages are safer than the stock market because the stock market is a little riskier than the housing market.

But at the same time, houses are not as safe as the US treasuries.

Which is why if 30 year US treasuries are paying right now 5% in interest rate and the stock market has somewhere between 10 to 11% right now, then mortgage backed secur somewhere there.

The third factor is the opportunity cost.

So imagine you have $1 million in your pocket.

Now you have many options to invest that money.

You could invest it in real estate, you could invest it in bonds, or you could invest it in the stock market, or you could buy gold.

Now if you take that money and you buy gold for example, then you cannot possibly invest that money in the stock market.

So the opportunity cost is basically what is the cost that I will be losing if I choose one option over the other.

If I'm going to invest my million dollars in mortgage backed securities, then I will be missing the opportunity in the market to invest in AI, in gold or any other investments.

So what are the opportunity costs for the mortgage backed securities?

The higher the opportunity cost, the higher investors expect from the mortgage backed securities.

So the faster the stock market is growing, the faster gold prices are growing, the higher are the US treasury yields, the more we are expecting the MBS or mortgage backed securities to pay.

So the Iran war literally changes the dynamic of the market for all these three factors.

Now first of all, what is going to happen to inflation?

So if you look at oil prices, they have spiked first to $120, then they have actually plummeted after that.

But now it's clear that oil prices will continue rising.

Because Iran literally sits at the Strait of Hormuz, where 20% of the global supply of oil passes through.

And this war is going to take a lot of time.

I told you this since day one because it was very, very clear.

And the way that I know that I was right on this is because we know that other nations, such as Japan and Union, are releasing their strategic oil reserves.

If they know that this war will be over in two weeks, why release your strategic oil reserves?

Because we know that it's not going to be over tomorrow.

So we gotta release them to stabilize the oil market.

So if oil prices will continue rising, that means that there is going to be higher inflation.