SPECIAL REPORT: Home Prices To Decline 9% This Year, Then Fall Even More | Melody Wright

**Adam Taggart** (0:00)
Now, Melody, I know that you were a very active participant in the mortgage industry during the first housing bubble bursting. Relative to the pain we saw in the housing market back then, what do you predict it's going to be this time around?

**Melody Wright** (0:21)
This is going to be much worse than what we experienced back then.

**Adam Taggart** (0:31)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Welcoming you here for a special report on housing. I am joined by housing analyst Melody Wright. Melody, how are you doing?

**Melody Wright** (0:42)
I'm doing well, Adam. How are you doing?

**Adam Taggart** (0:44)
I'm doing great. Look, thank you for dropping everything to join me for this special report that we're filming here. But I also want to let folks know, so we're going to get into Melody's latest update on the housing market, as well as some other big trends that are going on there that have her attention.
She just got a hold of the December data, which is sort of changing or altering in some ways her outlook for the housing market for next year. We're going to get into that in just a moment, or sorry, for the rest of this year. But I also just want to note that Melody is also going to be a featured speaker at the upcoming Thoughtful Money Spring Online Conference on Saturday, March 15th. And not only is she going to do a deeper dive into her housing outlook then, and of course, we'll have more updated data by then too. But she'll also be available to be taking Q&A from the audience. So you'll be able to ask her whatever questions that are most burning brightly in your mind. So anyways, folks, real quick, if you want to sign up for that conference and lock in the early bird discount price, the lowest that we're offering, you can go do that over at thoughtfulmoney.com/conference. All right, Melody, well, look, thanks so much for coming on. I asked you to come on to do this special report because we were talking briefly about how you had just finished doing your crawl through all the December housing data. And you actually shifted, I think, your call for where housing prices are going to go this year. And please correct me if I'm wrong on this, but my recollection from the last time we had you on the channel, you obviously have a lot of concerns about where housing is going. But you were thinking, I'm not quite sure, ready to predict that 2025 is going to be a down year for home prices. On average, nationally, in the US. And then when we talked the other day, leading up to calling you on here, you said, I'm actually going to start calling for an actual decline in housing prices. Did I get it right?

**Melody Wright** (2:39)
You did, yeah.

**Adam Taggart** (2:40)
Okay. So why don't we dive right into that? So what was so important about the December data, and what did you learn by walking through it?

**Melody Wright** (2:48)
Yeah, so I think what was interesting about 2023 and 2024 was just how low transactions were, Adam. And I think that what happened is because it was higher-end homes or higher-priced homes that were transacting, that median price remained very stubborn and started accelerating because of who was buying. Additionally, after the BTFP and 23, and everybody kind of got a hall pass, and we're all going to get bailed out, don't have to worry about anything. It's going to be no landing. The builders themselves also didn't have to really cut as aggressively as I expected for 2024 And they were able to, at the housing market, just kind of skated along. And 2023 and 2024 looked very similar to one another, which is so fascinating if you just think about how much drama was involved. And maybe it's because I'm watching the headlines like a hawk that I see it, but it just it felt like it was either going to be, oh my gosh, housing's starting again. It's going to take off like a rocket or oh my god, we're never selling another home. You were just waffling between these two because of, we started out 24 with the pivot in December of 23 from Jay Powell. And I mean, the builders, they all got just crazy excited. Everybody did and then it was kind of like, oh, wait, that's not going to work out so much. Then we rounded the corner to the summer, very similar. We started to see the rates come down, and everybody thought the Fed's cutting, the Fed's cutting, yay. And then boom, the Fed cuts, mortgage rates stay sticky. We've talked about that in detail. And so there was just a lot of drama in the housing market.