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Economist Peter Schiff made his name by predicting the 2008 housing crash. Now he\u2019s sounding the alarm on another potential crisis in America\u2019s housing market \u2014 one that could see a wave of homeowners mailing back their keys.<\/p>\n
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\u201cWhy are housing prices so high? Because for a long time, the Fed kept interest rates at zero and so a lot of people were able to get really low mortgages, 3% mortgages, 4% mortgages,\u201d Schiff explained in a recent YouTube video [1].<\/p>\n
\u201cAnd because homes are bought \u2014 not based on what the home cost \u2014 but based on the monthly payment, the lower the monthly payment, the more somebody could pay for a house. Now you have a problem where housing prices went way up, but then mortgage rates went way up and home prices never came back down to levels consistent with more expensive mortgages.\u201d<\/p>\n
Indeed, mortgage rates have surged. The average rate on a 30-year fixed mortgage has climbed from below 3% just a few years ago to more than 6% today [2]. Normally, higher borrowing costs can cool down the market, but prices remain stubbornly high: the S&P CoreLogic Case-Shiller U.S. National Home Price Index has jumped more than 50% over the past five years [3].<\/p>\n
Schiff believes prices will \u201ceventually\u201d fall to match today\u2019s higher rates \u2014 a painful adjustment that, he warns, could trigger \u201ca housing emergency.\u201d<\/p>\n
\u201cIt’s going to create a bunch of defaults and a lot of people are going to walk away and mail in their keys because they can’t sell their houses for more than they owe,\u201d he said.<\/p>\n
The scenario sounds familiar. During the 2008 bust, many underwater homeowners \u2014 those who owed more than their homes were worth \u2014 simply mailed their keys to the lender and walked away.<\/p>\n
Today\u2019s market is different. Lending standards are tighter than during the subprime era, making widespread negative equity less common. Supply constraints are also a factor: Zillow estimates the U.S. is short roughly 4.7 million homes, a gap that has helped keep prices elevated [4].<\/p>\n
Still, Schiff remains wary. He argues that many owners are staying put only because they locked in ultra-low mortgage rates, limiting the number of homes for sale.<\/p>\n
\u201cBut at some point, there are people that have to sell their houses for whatever reason and if they have to slash the prices to do it, they may not have enough money to repay the mortgages. And so this could have a cascading effect,\u201d he warned.<\/p>\n
When economic clouds gather, gold often returns to the spotlight.<\/p>\n
Unlike paper currency, the precious metal can\u2019t be printed at will \u2014 and it isn\u2019t tied to the fortunes of any single country or economy. That makes it a popular refuge when a downturn looms.<\/p>\n
Gold has rallied more than 40% over the past 12 months and Schiff expects further gains.<\/p>\n
Read more: Here are the 7 top habits of \u2018quietly wealthy\u2019 Americans<\/a> \u2014 how many do you follow?<\/p>\n \u201cI still think we have a good shot at hitting $4,000 gold by the end of the year,\u201d he said in a recent episode of his Peter Schiff show [5].<\/p>\n Major banks share a similar outlook: Goldman Sachs [6] and JPMorgan [7] both forecast that gold could hit $4,000 an ounce by 2026.<\/p>\n For investors, a gold IRA is one option for building up your retirement fund with a safe-haven asset.<\/p>\n Opening a gold IRA with the help of Goldco<\/a> allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.<\/p>\n With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver<\/a>.<\/p>\n If you\u2019re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today<\/a>.<\/p>\n While Schiff is wary of the U.S. housing market, he acknowledges one persistent trend: rising rents.<\/p>\n \u201cRents go up every year,\u201d he noted on his show [5].<\/p>\n America\u2019s housing affordability crisis is, in part, a reflection of broader cost-of-living pressures \u2014 and it underscores how real estate can serve as a hedge. As inflation drives up the cost of materials, labor and land, home values tend to rise as well. Rental income often follows suit, giving landlords a stream of cash flow that adjusts with inflation.<\/p>\n In fact, investing legend Warren Buffett has often pointed to real estate as a prime example of a productive, income-generating asset. In 2022, Buffett remarked that if you offered him \u201c1% of all the apartment houses in the country\u201d for $25 billion, he would \u201cwrite you a check [8].\u201d<\/p>\n Of course, you don\u2019t need billions \u2014 or even to buy a single house \u2014 to benefit from real estate investing. Crowdfunding platforms like Arrived<\/a> offer an easier way to get exposure to this income-generating asset class.<\/p>\n Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100<\/a>, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.<\/p>\n The process is simple: browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you\u2019d like to purchase and then sit back as you start receiving any positive rental income distributions<\/a> from your investment.<\/p>\n Another option is First National Realty Partners (FNRP)<\/a>, which allows accredited investors to diversify their portfolio through grocery-anchored commercial properties without taking on the responsibilities of being a landlord.<\/p>\n With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart<\/a>, which provide essential goods to their communities. Thanks to Triple Net (NNN) leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.<\/p>\n Simply answer a few questions \u2014 including how much you would like to invest \u2014 to start browsing their full list of available properties<\/a>.<\/p>\n Join 200,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/p>\n At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.<\/p>\n We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines<\/a>.<\/p>\n [1]. @peterschiff<\/a>. YouTube post on Sept. 12, 2025<\/p>\n [2]. Federal Reserve Bank of St. Louis<\/a>. \u201c30-year fixed rate mortgage average in the United States\u201d<\/p>\n [3]. S&P Global<\/a>. \u201cS&P cotality case-shiller U.S. national home price NSA index\u201d<\/p>\n [4]. Zillow<\/a>. \u201cUS housing deficit grew to 4.7 million despite construction surge\u201d<\/p>\n [5]. @peterschiff<\/a>. \u201cYouTube post on Sep. 17, 2025\u201d<\/p>\n [6]. KITCO News<\/a>. \u201cMorgan Stanley, Goldman Sachs, UBS all recommend buying gold after latest Trump tariffs\u201d<\/p>\n [7]. JP Morgan<\/a>. \u201cWill gold prices break $4,000\/oz in 2026?\u201d<\/p>\n