> ## Content Index
> Fetch the complete content index at: https://www.mortgagemomradio.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# Is the Housing Market About to Crash — or Are You Just Waiting for Nothing?
- URL: https://www.mortgagemomradio.com/is-the-housing-market-about-to-crash-or-are-you-just-waiting-for-nothing/
- Published: 2023-06-21T21:00:00.000Z
- Updated: 2026-09-04T20:59:20.000Z
- Description: A week after the Fed's first pause in ten meetings, Debbie reads the actual crash forecasts — Elon Musk on one side, Fannie Mae, NAR and Redfin on the other — then turns to record credit card debt and what homeowners with equity can do about it.
- Author: Deborah Marcoux
- Tags: Podcast, Mortgage Mom Radio, #episode-backfill

Mortgage Mom Radio • Live show from Wednesday, June 21, 2023 • 56 minutes • Hosted by Debbie Marcoux, NMLS #237926

One week after the Federal Reserve paused rate hikes for the first time in ten straight meetings, Debbie walks through the question filling up her voicemail: is the housing market about to crash, and should you keep waiting? She reads the actual forecasts — Elon Musk on one side, Fannie Mae and the National Association of Realtors on the other — then turns to the number nobody wants to talk about: record credit card debt, and what homeowners with equity can actually do about it.

## Key takeaways

- **The Fed paused — but signaled two more hikes.** After raising the prime rate by a full 5% across ten consecutive meetings, the Fed held steady on June 14\. Officials indicated a likely quarter-point increase at the next meeting and possibly another after that. Debbie's own take: she'd rather they had ripped the Band-Aid off and done a half point at once.
- **Rates improved slightly *because* the hike didn't happen.** The quarter point everyone expected had already been priced into lender rate sheets before the meeting. When it didn't come, rate sheets improved a little — small, but real.
- **The crash forecasts don't agree with each other.** Elon Musk publicly predicted home values would follow commercial real estate down. The National Association of Realtors, the National Association of Home Builders, Redfin and Zillow economists all expect a modest correction instead. Fannie Mae's forecast at the time: about a **1.2% decline in 2023 and 2.2% in 2024**.
- **Today's homeowners are not 2008's homeowners.** Per a Redfin study Debbie cited, **82.4%** of current homeowners with a mortgage are locked in below 5%, with strong credit and heavy equity — which is why economists expect a correction, not a foreclosure wave.
- **Credit card debt hit a record.** Total U.S. card balances sat near **$986 billion**, and roughly **35%** of American adults were carrying card debt. Because card and HELOC rates are tied to the Fed funds rate, every hike raises the interest on balances you already owe — with no special notice required.
- **Run your blended rate before you decide a refinance is crazy.** A 4% first mortgage next to a 12.5% HELOC and 21–29% credit cards can blend out to roughly 7% — right around where Debbie was locking refinances at the time. The mortgage payment may go up while your *total* monthly outflow goes down.
- **If you truly believe values will fall, that's an argument to act now, not later.** Equity is what makes a consolidation possible. If values drop first, the equity you would have used to get out of debt isn't there any more.

## Chapters

- 01:00What today's show covers
- 06:30What the Fed actually did on June 14
- 08:00Two more hikes signaled — and why rates improved anyway
- 12:30Bankrate: “Is the housing market about to crash?”
- 14:30Elon Musk's prediction vs. the housing economists
- 17:50Fannie Mae's forecast: 1.2% down in 2023, 2.2% in 2024
- 18:30What that means if you're a buyer sitting on the fence
- 23:20Debbie's opinion: why not just rip the Band-Aid off?
- 26:00Record credit card debt and what rate hikes do to your balance
- 30:40Homeowners: the HELOC you took instead of refinancing
- 33:30Running the blended rate — and the math that decides it
- 42:20Q&A: I did a HELOC and I'm building an ADU — what now?
- 46:20Forbes: will the housing market crash in 2023?
- 52:20What a 10% drop actually looks like in Los Angeles County
- 54:20Wrap-up and the Fourth of July break

## Questions answered on this show

### “I took a HELOC and I'm building an ADU right now — what should I do when it's finished?”

Wait until the build is done, then get the numbers run. ADUs almost never come in at the estimate — a build quoted at $100,000 comes in at $130,000, and the extra $30,000 usually lands on credit cards. Once the project is complete and you know the final HELOC balance and any card debt that came with it, that's the moment to look at consolidating everything into one fixed payment, because the HELOC rate is adjustable and moves with every Fed hike. It may turn out that what you have is already the right structure — and if so, that's the answer you'll get.

## This week's numbers (week of June 21, 2023 — averages, not quotes)

- Fed funds target: **5–5.25%** after the June 14 pause — the first hold in 10 consecutive meetings, following a full **5%** of increases
- Fannie Mae home price forecast: **−1.2% in 2023**, **−2.2% in 2024**
- Case-Shiller national home price index: **+1.3%** month over month for March before seasonal adjustment, **+0.4%** after — the second straight monthly increase following seven straight declines
- Regional split: Southeast **+5.4%** year over year, West **−6.2%**; Seattle **−12.4%** and San Francisco **−11.2%** at the bottom
- Share of mortgaged homeowners with a rate below 5%: **82.4%** (Redfin)
- Total U.S. credit card balances: about **$986 billion**; roughly **35%** of adults carry card debt, and only about **54%** of cardholders pay in full each month
- Refinance rates Debbie was locking at the time: **just under 7%**, with **6.75%** and **6.5%** quoted as the going range

*Your rate depends on FICO score, property type, loan balance, and loan purpose. These are national conforming averages for context, not a quote.*

### Find out what your blended rate actually is

Call [844-935-3634](tel:8449353634) (844-WE-LEND-4), [start an application](https://www.mortgagemomradio.com/apply/), or run your numbers with the [mortgage calculators](https://www.mortgagemomradio.com/tools/). Get the weekly rate rundown in the [newsletter](https://www.mortgagemomradio.com/newsletter/).

Full transcript (lightly edited for clarity) 

*Auto-generated captions cleaned for readability. Sponsor messages, commercial breaks, and repeated housekeeping have been trimmed; licensing information appears at the bottom of this page.*

### What the Fed did — and what they signaled next

Welcome to Mortgage Mom Radio. I'm Debbie Marcoux, the Mortgage Mom, and today we're talking about the Federal Reserve: what they did last week, how that's changed things this week, and what it means for you. Jerome Powell was talking again today. We'll also get into consumer debt, because credit card balances are at levels we haven't seen in a very long time.

I have to apologize for last week — I wasn't well enough to go live, and radio ran a replay of the week before. That's the case for opting in to the text list: if you'd been on it, you'd have known there was no live show instead of sitting there waiting for one that never came.

So, what went down. The Fed decided to pause the rate hikes. For weeks we'd been talking about what they might do, and the anticipation was a quarter-point increase — which had *already* been built into the rate sheets we were quoting clients. Then they came out and said: we're going to pause. We've done it 10 times in a row, we've raised the prime rate by a full five percent over those 10 meetings, and we're going to let that settle into the economy before we decide anything else.

Reading into what they said, and watching Powell, what most financial experts expect is another quarter point at the next meeting, and they've even indicated another quarter after that. Now, what they say they'll do and what actually happens can change completely inside six weeks. But as of today, that's the expectation.

The nice part is that since last Wednesday, rates actually improved a little — because that quarter point everyone had priced in didn't come to pass. It wasn't huge. But we'll take any downturn we can get.

One thing to keep in mind about the timing: those meetings are six weeks apart, not monthly. Ten meetings in a row is a very long stretch, and five percent in that span is very, very fast. My own opinion? I don't know why they paused. If they expect another quarter in six weeks and another quarter six weeks after that, why not rip the Band-Aid off, give us the half point, and hold? But there are much smarter people than the Mortgage Mom making that call, and I'd guess they need to test the water and let the dust settle before they commit.

### Is the housing market about to crash?

The question that's been top of mind for everyone: are we in a recession, is one coming, and when it comes, do home values drop? I pulled a few articles so I'm giving you real information and not just my gut.

The first is from Bankrate, published June 16, called “Is the housing market about to crash? Here's what experts say.” As of April 2023, home prices had declined year over year for three consecutive months, with February's drop the first in nearly 11 years. The National Association of Realtors reported median prices in spring 2022 topped $400,000 for the first time ever — and even after the recent retreat, prices are up by more than $100,000 since the pandemic began in March 2020\. Bidding wars have largely faded, inventory is loosening, the frothiness is gone.

Then you get the opinions. Elon Musk tweeted that commercial real estate is melting down fast and home values are next. After the June 14 meeting, Powell told reporters he's watching housing closely — housing is very interest-rate sensitive and one of the first places either helped by low rates or held back by high ones.

On the other side: Lawrence Yun, chief economist at the National Association of Realtors, says the market is clearly turning, but housing economists and analysts expect any correction to be modest. Rob Dietz, chief economist at the National Association of Home Builders, sums up the consensus: “We're thinking this is going to be a moderate downturn.”

Why not a repeat of 2008? Because homeowners' personal balance sheets are far stronger than they were 15 years ago. The typical homeowner with a mortgage has excellent credit, a large amount of equity, and a fixed rate locked in well below five percent — a Redfin study puts that at 82.4% of all current homeowners.

And Fannie Mae came out with a forecast of about a 1.2% decline in home prices in 2023, and 2.2% in 2024\. So you've got Elon Musk saying the floor falls out, and you've got Fannie Mae, NAR, Redfin, Zillow and the home builders saying percentage points. Everybody has a different economist doing different research trying to pinpoint the same thing.

### What that means if you're a buyer

If Fannie Mae is right, and most of the chief economists are right, and we're talking about percentage-point declines — then sitting on hold isn't doing you any justice. You're setting aside the opportunity to own a home, to have the vehicle that returns equity to you. It's a savings account: you make a payment every month, your balance drops, and your value — even if it dips — eventually goes back up. That's the normal cycle.

So if it's your time to buy and your family needs a home and you find the one that works, it does not make sense to sit on the fence. That's my opinion as the Mortgage Mom. If you believe Elon Musk instead — and I'm not saying he's wrong, he's a very smart guy — then that's the hat you hang it on and you wait. It depends on you, your family, and who you believe.

At the end of the day there's never a bad time to buy a home. There's really only a bad time to *sell*. If you buy and values drop, you don't sell. You hold. You stay where you are. If we hit a recession, rates have to come down to give everyone relief — and you refinance and make the payment better on a property you already own, which eventually goes back up in value anyway.

And there were articles I read on Forbes saying values have already started ticking back up: from June 2022 to June 2023 a 1.7% decline, with prices now rising again. So some people think the decline we were going to get has already happened.

### Record credit card debt

Now the part I want to focus on, because it's high-topic right now: credit card debt. Many households are feeling the repercussions of the rate hikes. Cards got more expensive, minimum payments went up, and the cost of utilities, groceries and gas pushed people onto those cards to cover expenses — which only exacerbates the problem.

From a Business Insider piece dated June 20, reporting on a creditcards.com study released that Tuesday: according to the Federal Reserve Bank of New York, total credit card balances stayed around a record $986 billion between the fourth quarter of 2022 and the first quarter of 2023\. A January Bankrate survey found 35% of American adults carry some form of credit card debt. Ted Rossman, senior industry analyst at Bankrate, who led the study, said just 54% of cardholders pay their bills in full every month, and that card debt is often several multiples higher than other forms of debt — and unlike a home or an education, it builds no value.

Relief isn't coming soon. The FOMC held rates steady in June, pausing after 10 consecutive increases in 15 months, leaving the target between 5 and 5.25% — but projected two more quarter-point hikes before the end of the year. After the May hike, major lenders including Chase and Bank of America began raising card rates in June, and Rossman expects that to continue.

Here's the part people miss: future increases hit *existing* balances as well as new purchases. When the underlying index changes, card companies don't have to give you special notice. Whatever you owe on that card when rates go up, that balance immediately costs you more — and the same is true of home equity lines of credit.

### Homeowners: the HELOC you took instead of refinancing

If you're a homeowner, the double-digit appreciation of the last few years means you have equity to do something with. And remember, HELOC rates are adjustable too, and they move immediately when the Fed moves.

A lot of you took an equity line specifically because you didn't want to touch your first mortgage. You were going to buy another property with it. Or do home improvements. Or pay off cards — and refinance it all later when rates came down. You're one of the people in that article with a rate under five percent, and you weren't going to give it up.

Now the equity line payment is up, the interest on it is making the balance grow, the credit cards aren't getting paid down because you're making minimums, and you're still using the cards to cover the month. That's when you need to sit down with someone and go through all of it.

And I want the people listening who *aren't* homeowners to hear this: if you owned a home, you'd have an escape route. Homeowners do have options — an equity line, a fixed-rate second, or a full refinance.

Many of you are stubborn about it: “But my rate is four percent.” Okay. If your rate is 4% and your credit cards are at 21, 25, 29 percent and you're carrying ten or twenty thousand, or you've got a $150,000 equity line at 12 or 12.5 percent — when you calculate the *blended* rate across all of it, you're probably somewhere around seven percent. And seven percent is about what a new refinance would be, possibly lower. We've been locking people just under seven; 6.75 and 6.5 have been the going range. Over 30 years, with the debt paid off. Your mortgage payment may go up, but your total monthly outflow cash-flows you better.

I'm not a financial advisor — I have to say that — but that's the Mortgage Mom education of the day. The math doesn't lie. We're not here to push you in a direction that doesn't make sense. Look at the math and decide.

One more thing people are advised to do: open a new card with a 0% balance transfer. Fine in theory. But if you're maxed out, your score has already dropped — not because you missed payments, but because your balances are at your limits — and that makes qualifying for the transfer much harder.

And student loans. Many of you haven't made a payment in years because they were deferred. Those payments are coming due again, and if you haven't budgeted for them it's going to hurt. That's another debt worth looking at in a consolidation. Same with personal loans — if you took one to pay off credit cards, look at what that rate actually is. I'd guess 12 to 15 percent, over about five years, and that payment can be extraordinary. Which sends you back to the cards to survive. Let's look at the whole picture: personal loans, cards, student loans, equity lines.

### For the pessimists

One last thing for homeowners, and I want it in the back of your head. Say you're a pessimist. You think the recession is around the corner and property values are going through the floor.

Rates are expected to hold for a while — the most recent data I've read says they pause by the end of this year and hold through 2024, with real relief more likely in 2025\. That can change any day. But if rates aren't coming down soon enough to refinance your way out, and you're swimming in debt, and you believe values are going to fall — your property value today is higher than it has ever been.

If values drop, you don't have the equity to pull out cash to pay off debt. You don't have it to improve your home. You don't have it at all. So if that's genuinely what you believe, that's an argument for consolidating now, while the equity exists, getting your life breathing a little easier, and refinancing again in a year and a half if that's what it takes.

For the record, that's not my opinion on the matter. I don't believe we're going to see things fall through the floor. But a lot of you do, and I think it's important to address every thought process in the room.

### Q&A: I did a HELOC and I'm building an ADU

Rochelle says she did a HELOC and is building an ADU now, and that this session has been valuable.

That's great. When the ADU is done, you probably do want to look at getting that HELOC consolidated, depending on how much you had to draw — ADUs are not cheap. And here's what happens a lot: you think the build will cost $100,000, you get into it, and it ends up at $130,000\. You don't have the extra $30,000, so it goes on the credit cards. So when the build is finished, call us and let's see what we can do. And maybe the answer is that things are exactly where they should be — that's exactly what we'd tell you.

### Forbes: will the housing market crash in 2023?

Last article, from Forbes Advisor, June 15: “Housing market predictions for 2023 — when will home prices be affordable again?”

Due in part to the ongoing inventory crunch keeping prices elevated, many economists predict the market corrects from the double-digit jumps of the past few years rather than crashes. The S&P CoreLogic Case-Shiller home price index posted a month-over-month national price growth reading of 1.3% for March before seasonal adjustment, 0.4% after — the second consecutive month of modest national increases following seven straight decreases. Experts consider that an indicator that home price declines are now a thing of the past.

Which is rather different from what Elon Musk thought. Two months of increasing prices do not make a definitive recovery, but as Craig J. Lazzara, managing director at S&P Dow Jones Indices, put it in the report, March's results suggest the decline that began in June 2022 may have come to an end — while current mortgage rates and the possibility of economic weakness remain a headwind for at least the next several months.

Whether prices rise or fall depends heavily on where you're looking. Southeast metros like Miami, Tampa and Charlotte saw year-over-year gains of 4.7% to 7.7%. Cities that had the biggest pandemic booms — Austin, Boise, Salt Lake City, and the West Coast — are the ones coming down. As Lazzara said, the farther west you look the weaker prices are, with Seattle at −12.4% and San Francisco at −11.2% at the bottom, while the Southeast's 5.4% gain remains the country's strongest region.

Despite those declines, experts point out that today's homeowners stand on much more secure footing than those coming out of 2008, with most borrowers holding positive equity — which makes a crash unlikely. As Zillow economist Nicole Bachaud put it, homeowner equity is at the highest level it's been in decades. Will there be a lot of foreclosures in 2023? Basically no — because people have equity. Why would you let a home go?

On timing: buying a house in any market is a highly personal decision, and trying to predict the year is not a home-buying strategy. Buyers sitting on the sidelines in anticipation of lower prices tomorrow may end up disappointed, says Neda Navab, president of the U.S. region at Compass. And as a senior macro economist at Zillow Home Loans put it, the housing market is almost impossible to time — the best time for prospective buyers is when they find a home they like, that meets their family's current and foreseeable needs, and that they can afford.

### What a 10% drop actually looks like

So home buyers: get off the fence and start looking. I don't believe we see a crazy crash. If we see values drop, I think it's modest — percentage points. One, two, three, five, even ten percent.

Ten percent sounds like a lot. But in Southern California, in Los Angeles County, where the median single-family value is around $700,000 to $750,000, ten percent is $70,000 to $75,000\. That is not something to freak out about. It is not something that would make you walk away from your home or end up in foreclosure. You own a home. You have stability. Over time it always goes back up, and you're gaining equity simply by owning something.

And homeowners — if you're swimming in debt, if you're not sure a refinance is the right direction but you'd like to find out, you need to get off the fence too. You have a lot of equity. And if you're one of the people who believes a crash is near, then you especially need to make decisions about that debt sooner rather than later.

### Wrap-up

My office is always open. You can call, email through the website, or send a text with your name asking us to call you — if we're on another line, leave a message and we'll call back within an hour or two. If you want to know when I go live so you can ask questions during the show, text the word MOM to 844-935-3634 — that's 844-WE-LEND-4 — and you'll get one text a week. And at mortgagemomradio.com you'll find the calculators and a way to book a free phone consultation.

Heads up: we will not be here next week because of the holiday. I hope you all enjoy your Fourth of July — if I had it my way I'd be out boating in Havasu; my son is going without me. I'll be back the Wednesday after that. Talk to you all real soon.

Debbie Marcoux is licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, NMLS ID #237926, and additionally licensed in AZ (0941504), FL, GA, HI, ID, IL, NV, NC, OR, TN, TX, and WA. Rates and figures discussed were current as of the air date of June 21, 2023, reflect national conforming averages, and are not an offer of credit or a rate quote. Debbie Marcoux is not a financial advisor; consult qualified professionals about your individual situation.