We just wrapped up an eye-opening conversation with mortgage veteran Michael Smalley, Regional Vice President at CrossCountry Mortgage. With over 22 years of experience, Michael brings a level-headed and data-backed view of what’s happening in the housing market, interest rates, and the broader U.S. economy.

If you’re thinking about buying, selling, or investing in real estate — or just trying to make sense of all the economic noise — this one’s for you.

📉 Yes, a Recession Is Coming (or Already Here)

Michael didn’t sugarcoat it: a recession is likely already underway. But before panic sets in, let’s clarify what that really means.

A recession is defined as two consecutive quarters of negative GDP. Historically, they happen every 5–15 years.
This one? It’s not driven by real estate (like in 2008), but by years of government overspending and rising inflation.

$35 trillion in national debt means the government is now spending over $1 trillion per year just on interest—and that’s projected to rise.

The Feds are now being forced to “trim the fat,” cutting back on spending and letting certain programs lapse in an effort to bring inflation down and avoid a complete fiscal blow-up.

Think of it like this: Dave Ramsey tells individuals to cut expenses and live on ramen to pay off debt. That’s basically what the government is doing right now on a national level.

💰 How This Affects Mortgage Rates

Rates are still historically high — currently in the 6.25% to 6.75% range, depending on the loan program, credit score, and whether you’re buying points.

But here’s the kicker:

📌 5.5% is the psychological tipping point.
That’s the rate where most buyers re-enter the market, according to a national survey by Reventure Consulting.

Michael believes we’ll hit the 5s again sometime in 2025, though it won’t be a straight line down. Expect ups and downs, but the overall trend should be downward.

🏡 What It Means for Buyers and Sellers in 2025

We are currently seeing over 6 months of housing inventory in Orlando — meaning it’s becoming a more balanced (or even buyer-leaning) market. That said, the best homes in desirable areas are still moving fast and often over asking price.

For Buyers:
Less competition now = more negotiating power.

Once rates drop, expect multiple offers and price increases to return.

If the right house shows up, don’t wait for the rate — you can always refinance later.

For Sellers:
Be realistic. Buyers are payment-conscious, not price-chasing.

If you bought in 2022 or 2023, you may not see the equity growth you’d hoped for yet. But if you price right, your home will move.

🛑 Don’t Believe the Headlines (Not All of Them, Anyway)
Michael shared a powerful example: a viral post on “skyrocketing delinquencies” turned out to be misleading data about multifamily properties — not residential homes. In fact, delinquency rates today are still lower than pre-COVID levels.

Takeaway? Get your information from trusted, unbiased sources, not just sensational headlines.

🔮 Our 2025 Housing Market Predictions
Interest Rates: Expect a gradual decline, potentially into the high 5s by late 2025.

Home Prices: Most markets will stay flat to modestly up/down (±2–5%), depending on location.

Recession Timing: Likely to be officially announced by Q3 — but already impacting job markets and consumer spending now.

“This is the most predictable market I’ve seen in five years.”
— Rick Bosley

🎥 Want Weekly Market Updates from the Source?
Michael goes live every Monday at 10AM with his Market Update Zoom Call. Follow him on Facebook (search: Michael Smalley) to join live. It’s not recorded or posted — you’ve got to be there to get it.

Final Thoughts
Real estate is local, the economy is cyclical, and your goals are personal.