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The man who made a fortune betting against the housing market in 2008, just said out loud that housing is starting to creek. Michael Bur, the big short guy, but in the very same breath, he said he doesn't see a repeat of 2008 coming out of housing. So, is it cracking or isn't it? Here's what most people miss.
If home prices really are slipping, you might not see it in the headlines because some of the biggest discounts in housing right now never show up in the price at all. Before we dig in, if you like clear number-based housing breakdowns, hit like and subscribe to Housing Signal. All right, let's get into it.
First, what he actually said, because the headlines stretch it. In midepptember, Bur told subscribers of his Substack newsletter, Cassandra Unchained, that the housing market is starting to creek a bit and that prices might already be falling. Then he added that he doesn't see a second great financial crisis coming from housing.
Notice the wording creek might. That's not a crash call. It's a hunch from someone with a famous track record. And one more thing worth knowing. He's also holding shares in Fanny May and Freddy Mack. So, he has his own bets running. He's an investor with a view, not a crystal ball. So, what's he worried about?
Something called the rate lock. In the second quarter of this year, 49.1% of all outstanding mortgages carried a rate below 4% according to realtor.com. Those homeowners aren't listing, which keeps supply tight and helps hold prices up. Bur's concern is that the lock might not hold if rates keep climbing.
He said higher rates could spook owners into all sorts of bizarre behaviors like selling before rates go up even more. Let me show you why those owners stay put with a hypothetical couple, Ben and Carla. In 2021, they took out a $320,000 loan at 3.25%. Their principal and interest payment is about $1,393 a month.
Now, say they sell and buy a similar house with the same size loan at today's average of 7.32%. That payment jumps to about $2,198. That's roughly $86 more every month, close to $9,700 a year for the same loan. Flip it around and their old payment would only support a loan of about $200,700 at today's rate.
That's about 37% less house. Quick caveat, this is principal and interest only. And Freddy Max survey rate assumes 20% down with strong credit. So treat it as a benchmark, not a quote. Here's what keeps this from turning into a flood, though. Realtor.com projects that if rates stay above 6%, mortgages at 6% or higher could make up between 27 and 28 1.5% of all loans by mid 2027.
That would be the highest share in more than a decade. But notice how it gets there. Slowly. One life event at a time. A job move, a divorce, a new baby. That's a slow Thor, not a stampede. It also means prices are holding partly because people are stuck, not because buyers are lining up. Those are two very different kinds of support, and the second one is a lot easier to knock over.
Now, the part of Bur's comments that grabbed me. A Nashville broker pointed out that about 5,400 homes were for sale in August against roughly 820 sold and 900 pending. Bur said he was shocked and called it potentially an all-time record for a city. That's one broker's count, not official data. So, I wouldn't build a plan on it.
But look at what Redfin found. In the 3 months ending in May, Nashville sellers gave concessions in 75.5% of home sales, the highest of the 28 big metros it tracked. And that brings us to the hidden discounts. Redfin says sellers across the country gave buyers some kind of concession, meaning money toward repairs, closing costs, or a rate buy down in 44.7% of August sales.
That's the highest August share since at least 2020. In nearly 16% of sales, 15.8, the seller did both. Cut the price and added a concession. Atlanta led the pack at 72.8%. San Jose sat at just 4.2. too. Here's why that matters for Bur's claim. Say a seller lists at $400,000 and agrees to a 3% credit toward closing costs.
That's $12,000. The recorded sale price usually stays at $400,000. The buyer's real cost is closer to $388,000. In the data, nothing moved, and the big price index, everyone quotes, Case Schiller, is a 3-month average published with about a 2-month delay. So, what it shows can reflect deals signed a couple of months earlier.
Think of it like checking today's weather by looking at last month's rain. Builders play a similar game with incentives, and we covered that in an earlier video, so I'll skip it here. What I want you to see is the scale of the trade. A $12,000 credit sounds big, but in Ben and Carla's math, the higher rate costs them about $86 a month.
$12,000 covers roughly 15 months of that gap. The credit is one check. The payment is 360 of them. So, is a crash coming? Here's the honest version. Bur himself says no. And the official numbers haven't flipped. In August, the median existing home price was still up 1.6% from a year earlier, even as sales hit a 14-month low.
Redfin says the market has tilted toward buyers with 47% more sellers than buyers this spring. But San Francisco is still a sellers market. And in New York, fewer than 3% of sellers offered concessions. So whatever is cracking isn't the whole country. It's mostly the Sunb Belt, and it's cracking quietly through credits and cuts before it shows up in a headline price.
One more detail from that same story that's actually useful. In midepptember, the Federal Housing Finance Agency lined up Fanny May's rules with Freddy Max so servicesers can now reach out to eligible Fannybacked borrowers and walked them through cancelling private mortgage insurance once their home has enough equity.
If you bought with less than 20% down, that could be real money. But it also shows why a softer market matters to owners. If prices slip, the equity cushion that lets you drop that insurance gets thinner. So, what do you do with this? None of this is financial advice, just how I'd think about it. First, shop by net price, not list price.
Ask your agent what sellers in your zip code are actually giving up, then subtract it. Second, run your budget at today's rate, not the rate you're hoping for. Third, watch your own zip code, not the national headline. The share of sales with concessions and how long homes sit tell you more than one big average.
And fourth, try a rule from Bur's own list of life advice posted in October. Buy half the house you can afford. Run it. If a lender will approve a $400,000 loan, the payment at 7.32% is about $2,748 a month. Half that loan is about $1,374. That gap is your cushion for taxes, insurance, repairs, and a rough year.
Here's the takeaway. Bur is saying housing is creaking, not collapsing. And the creeks show up first where headlines don't look. In closing credits, in paid repairs, in rate buyowns, in the gap between what a house is listed for and what it really costs. The price in the report is the sticker. Your real price is what's left after the concessions.
And nobody, Bur included, can promise where prices go from here. So tell me in the comments in your area are sellers cutting prices, handing out concessions, or still holding firm?
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