Jamie Dimon says a major correction could be on the way within two years. What could that mean for the housing and mortgage markets?
The stock market is soaring, but one lender warns that this does not reflect the underlying reality, citing “considerable stress in the economy.”
These comments follow a stark warning from Jamie Dimon, chief executive of JPMorgan Chase, who told the BBC that US equities may be poised for a sharp correction. Dimon said he is “far more worried than others” about a significant downturn, suggesting it could occur within the next six months to two years.
Dimon’s concerns stem from a combination of risk factors—stubborn inflation, heavy fiscal spending, geopolitical uncertainty, and a world that feels “a much more dangerous place.” For mortgage professionals, his warning is no distant echo from Wall Street. A stock market retreat could quickly reshape interest rates, sentiment, and borrower behavior.
Hidden strains in the economy
While financial markets have surged in 2024, Glen Weinberg, managing partner at Fairview Commercial Lending, believes the rally masks deeper stress.
“There’s a lot more stress in the economy than the stock market is really picking up,” Weinberg said. “People are struggling to pay for basics like groceries and gas, even as the market soars. Add in phantom debt from buy-now-pay-later plans and rising student loan repayments, and it’s clear household-level pressure is building beneath the surface. Personally, I’m not surprised to see foreclosures rising—it’s a reflection of real financial strain that isn’t showing up in the traditional data.”
That disconnect—between buoyant markets and household realities—is becoming harder to ignore.
“If you look at the stock market, it’s soaring. And yet, people are having problems paying for groceries. Now people have to start paying back their student loans, which is causing more stress… all of these little items are leading to considerable stress in the economy that we aren’t picking up in our traditional numbers.”
For brokers, such underlying strain matters. Even modest financial stress can translate into tighter budgets, missed payments, and a slowdown in home-purchase intent.
Rates and reality: The myth of a Fed rescue
Dimon’s caution on overvaluation comes as mortgage rates hover near multi-decade highs. Some market watchers expect Federal Reserve cuts to bring relief, but Weinberg sees that faith as misplaced.
“The market has this perception that the Federal Reserve is going to bail real estate out. The Federal Reserve can’t—regardless of how much they cut rates—because of these other items: inflation and market expectations. Mortgage rates are going to stay high, which is going to continue to impact the real estate market.”
The persistence of elevated rates could limit affordability, prolong sluggish deal flow, and push brokers to compete more aggressively for a shrinking pool of qualified borrowers.
Foreclosures: Early tremors
Recent data show a modest but steady rise in foreclosures—a signal, Weinberg says, that household pressures are starting to surface.
“I’m not surprised at the uptick in foreclosures. I mean, I’m kind of feeling it in the economy. I just don’t have the data to back it up… There’s a lot more stress in the economy than the stock market is really picking up.”
He expects those pressures to grow as inflation, unemployment, and debt obligations converge.
“I think there’s a fundamental shift in the economy that’s happening. And I do think that we’re going to see an increase in foreclosures over the next 18 months, not because of the pandemic era, but because of a change in the economy… inflation, mortgage rates, unemployment ticking up, and life happens.”
Echoes of 2008 – but not a repeat
The question naturally arises: Could today’s market turbulence trigger a collapse reminiscent of the global financial crisis? Mr. Weinberg doesn’t think so.
“If I look back to ’08, right before—and I didn’t know this was ’08. I mean, everything’s in hindsight. We started to see an increase in defaults in our portfolio… I didn’t put the dots together in ’08 that, figuratively, things were about to fall apart. But hindsight is 20/20—it’s pretty obvious now.
“So if I fast forward to now and stratify my portfolio… our portfolio has performed pretty much consistently over the last 12 to 18 months. So if I go off that data point, it would basically indicate that we aren’t going to have fallout in the next six to 12 months… we’re going to have some choppiness, and you will see some price declines, but not like in 2008.”
The fundamentals are stronger today, he said. “People have more equity, there are fewer variable-rate products, and billions of Wall Street dollars are waiting on the sidelines… so I don’t think we’ll see 30–40% declines—more like 10–20%.”
Vulnerable segments and localized pain
Not every sector will weather the storm equally.
“Where I am more concerned… is in the condo market… there’s going to be a lot more stress—whether it’s insurance issues or huge assessments… I’m seeing inventory double what it was a couple years ago in the condo market.”
For brokers, this may mean sharpening focus on regional resilience, borrower quality, and financing structures that can withstand further shocks.
Dimon’s warning and Weinberg’s ground-level view together paint a picture of an economy walking a fine line between resilience and fragility. Mortgage professionals should prepare for turbulence—but not catastrophe.
As Weinberg puts it:
“We’re going to have some choppiness, and you will see some price declines, but you don’t need to, like, jump out the window type price declines like in 2008.”
