Investor Steve Eisman, known widely for predicting the 2008 subprime mortgage crisis, which was dramatized in the 2015 movie The Big Short, says that he sees no signs of a similar crisis brewing in 2025.
Market Dynamics Fundamentally Different
Speaking on his podcast, The Real Eisman Playbook, on Monday, Eisman dismissed concerns regarding a potential real estate market crash, saying that current-day market dynamics are fundamentally different.
“The problems with the housing market today have nothing to do with subprime loans,” Eisman said. Instead, he pointed to the impact of sharply higher mortgage rates following the Federal Reserve's pandemic-era rate cuts.
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According to Eisman, millions of existing homeowners refinanced into 30-year loans at 3% to 4%, while new buyers now face rates between 6% and 7%. That disconnect has led to a market freeze, he says.
“The housing market is locked,” Eisman said, explaining that buyers and sellers are at a standoff due to sharply different mortgage rates, compared to just a few years ago. This has led to a situation where the same monthly payment would require home prices to be cut in half.
Eisman also downplayed the role of subprime lending in today's market. “Post Dodd-Frank, bank regulators increased the capital requirements on subprime mortgage loans so high that banks basically don’t make them,” he noted, adding that while some small financial companies still issue such loans, “it’s a small industry.”
“People just love to predict the end of the world,” he says, adding that as someone who has predicted it in the past, “I’m in no rush to predict it again. And I see no evidence of it.”
Housing Market Hits A Rough Patch
According to Nicholas Godec, head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices, “For the first time in years, home prices are failing to keep pace with broader inflation,” which he says is a significant concern, marking a shift away from being a wealth-building engine.
Last week, it was reported that U.S. home prices declined for a third consecutive month in June 2025, for the first time since 2010, sparking concerns of a crisis in the housing market.
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