• The Peel
  • Posts
  • Buying a House Just Got Worse

Buying a House Just Got Worse

🏘️ Sometimes, you just can’t win—especially if you’re trying to buy a house in the U.S. right now. Find out how January’s data made the situation even worse for buyers.

February 20, 2025

In partnership with



In this issue of the peel:

  • 🏘️ Sometimes, you just can’t win—especially if you’re trying to buy a house in the U.S. right now. Find out how January’s data made the situation even worse for buyers.

  • 🐝 Serve Robotics is bringing kickable robots to Miami, while Microsoft wants to bring burden to the quantum realm with Teams. Bumble shareholders fumbled the bag on earnings, and Etsy didn’t capitalize on a holiday boost. 

  • ☀️ Vanguard just saved America $350mn. If you don’t already have a shrine to Jack Bogle in your house, join me in creating one.

Market Snapshot

Banana Bits

Today’s Fastest Growing Company Might Surprise You

🚨 No, it's not the publicly traded tech giant you might expect… Meet $MODE, the disruptor turning phones into potential income generators.

Mode saw 32,481% revenue growth, ranking them the #1 software company on Deloitte’s 2023 fastest-growing companies list.

📲 They’re pioneering "Privatized Universal Basic Income" powered by technology — not government, and their EarnPhone, has already helped consumers earn over $325M!

Their pre-IPO offering is live at just $0.26/share – don’t miss it.

*Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
*The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
*Please read the offering circular and related risks at invest.modemobile.com.

Macro Monkey Says

Wannabe Homebuyers Can’t Win

You ever think to yourself, “It can’t possibly get any worse than this,” to then find out immediately that it absolutely can?

Yeah. That’s basically how I felt anytime my professors entered new grades into my transcript. 

And, unfortunately, that’s gotta be how prospective homebuyers are feeling. We thought 2025 could be the year that housing is back, but I think the LA fires effectively sum up how well that’s going.

Let’s get into it.

The Numbers

We’ll get data on existing home sales tomorrow, but based on the reports out yesterday, it’s not looking good.

According to the Department of Housing and Urban Development, which you wouldn’t ever have known existed even before DOGE, the U.S. housing supply barely budged in January.

Building permits, which authorize new construction of single and multi-family housing units, grew 0.1% to a seasonally-adjusted annualized rate of 1.483mn last month. That’s a 1.7% decline from January 2024.

Of that total, 996k were single-family, exactly in line with December.

Housing starts, which reflect permitted units that have actually broken ground on construction, declined 9.8% from December to 1.515mn. We’ll cut them some slack here, however—try digging anywhere above the Mason-Dixon line this time of year.

Compared to January 2024, starts were down just 0.7%.

Fortunately, there was some good news on the completion front, which reflects housing units that have finished construction and are now eligible for sale.

Last month, completions rose 7.6% from December to 1.651mn. That’s a 9.8% jump from January 2024.

Now, that data isn’t terrible. It could’ve been a lot worse, but given how long the U.S. Housing Ice Age has persisted, you’d think Uncle Sam might want to figure something out by now. But… nope.

Instead, mortgage applications reversed their gradual trend of increases that began late last year, declining 6.6% week-over-week for the period that ended yesterday, February 19th.

The sad part is that it’s with declining mortgage rates. 

30-year fixed-rate mortgages peaked in 2025 on January 16th at 7.04%. As of February 13th, prevailing 30-year rates hovered around 6.84%—not much, but honest work.

Ready for it to get even sadder?

Despite the lack of new construction permits and housing starts, the U.S. housing supply has actually risen substantially since this time last year. According to Redfin, active home listings are up 11.1% YoY as of February 9th:

Generally, when supply increases, the price of that asset or good will decrease. 

Under “normal” economic conditions, when the interest rate on an asset declines (e.g., the prevailing mortgage rate on homes), the asset price(s) will increase. 

However, because of the lock-in effect felt by existing homeowners who weren’t idiots like me and got a mortgage before 2021, the opposite has been true for the U.S. in recent years. 

The degree of our housing shortage has gotten to the point that prices have started to fall when mortgage rates decline. This is largely due to supply increases as existing homeowners who want to move finally list their houses for sale.

And yet, despite increasing supply and declining mortgage rates, home prices utterly refuse to decline:

The median sales price of homes in the U.S. rose 4.3% YoY. To make a slap in the face to wannabe homebuyers even harder, asking prices are up even more at 5.4%.

It’s good to see that wiggle room in between median asking and actual sales price—that at least suggests sellers don’t control all the negotiating power as they did in 2021–2023.

The Takeaway?

I’ll say it for the billionth time: The U.S. needs to build more houses—full stop, or, as my girlfriend would say, period.

The Fed Minutes that dropped yesterday show that a central bank was hesitant to lower rates anytime soon. Permits and starts were weak last month; unless existing homeowners start feeling extra generous, something else must be done.

So, because I’ve been screaming from the mountain tops for months, maybe years now, that the U.S. needs a federal program to incentivize more home building (just throw ‘em a damn tax break or something), we’ve officially taken action.

Today, we’re launching The Daily Peel petition for a functional housing market. If you want to be a part of the group that solves housing in the U.S., you can sign our petition here. 

Career Corner

Question

Hi mentors, I am having a first-round interview with a bank that has its main offices in the Midwestern region of the U.S.

One of my friends who did the interview said they asked, "Why the Midwest for IB?" and I kinda struggled to answer this myself, considering I'm currently living in the Northeast. Does anyone have any insights on how to answer this?

Answer

Typically, the best answer for regional focus is based on industry/sector preference. Chicago and the greater Midwest tend to be heavy industrials, somewhat financial institutions (lots of regional banks and insurance firms), and some big consumer brands (Proctor and Gamble, Kellogg’s).

Head Mentor, WSO Academy

What's Ripe

Serve Robotics (SERV) 13.1%

  • Soon, you won’t have to feel the guilt of making someone poorer than you deliver your takeout orders. Especially if you live in Miami—that day is today.

  • Serve Robotics, a maker of highly kickable, sidewalk-based, food-delivery robots, announced Wednesday an expansion into Miami via its existing partnership with Shake Shack and a new partnership with Mister O1 Extraordinary Pizza.

  • If you’re out in the 305, specifically in Brickell or Miami Beach, and you order Shake Shack via Uber Eats, your next order might be delivered by this little guy:

Microsoft (MSFT) 1.3%

  • Unsatisfied with its monopoly over regular computing, Microsoft wants to bring its dominance in sh*tty, barely-good-enough products like Teams to the quantum realm.

  • On Wednesday, Microsoft announced it had developed its first-ever quantum chip, called Majorana 1, and built with a proprietary type of material called “topoconductor” that solves the qubit scaling problem. 

  • It’s a bold strategy given that Google and IBM are the only other major players to announce quantum chips, so Microsoft doesn’t have many firms to copy off of.

  • Quantum stocks were even greater beneficiaries. Rigetti Computing rose 4.9%, IonQ was up 0.6%, and D-Wave Quantum rose 8.3% on the announcement.

What's Rotten

Bumble (BMBL) 30.3%

  • On Wednesday, shares in Bumble fell faster than my self-esteem after joining the app. Investors were just as disappointed with Q4 results as I was when I saw my “For You” matches.

  • Q4 revenue fell 4.4% to $273.6mn. The dating app firm did not report EPS numbers (must be a good sign) and signaled a 5.1% QoQ revenue decline, which was their best-case scenario in Q1.

  • Bumble App revenue was 3.8% YoY in Q4 and is expected to fall ~6% in Q1. Founder and (former?) CEO Whitney Wolfe Herd is set to return to the CEO seat with a new plan focused on expanding Bumble into a “lifestyle brand.”

  • The problem is obvious—online dating feels about as natural as a Hirevue. Let’s reserve the wh*ring ourselves out to corporate America, not each other.

Etsy (ETSY) 10.1%

  • Maybe an online marketplace for what looks like people’s 5th-grade class projects isn’t the best strategy, but Etsy’s gonna find out the hard way.

  • And… it’s not going so well, at least last quarter. The only online retailer everyone knows that isn’t Amazon reported $852.2mn in sales in Q4, missing Street estimates for $862.8mn.

  • EPS of $1.03/sh beat the $0.93/sh analysts were pricing in. The firm blamed heightened competition from TikTok Shop, Shein, and Temu, so I can imagine they’re pretty hyped about these tariffs.

Thought Banana

Build A Shrine to Jack Bogle

Sure, Buddha sounds like a pretty cool guy. But did he invent a ~$5tn asset class that allowed millions of people around the world to retire for the first time ever?

No. Jack Bogle did that. And now, the firm he founded—Vanguard—is making saving for retirement even easier. (I promise this isn’t a sales pitch).

Let’s dive in.

What Happened?

Since 1993, State Street’s SPDR S&P 500 ETF, trading under the ticker $SPY, has been the world's largest exchange-traded fund (ETF) (besides August 2011 when SPDR Gold, $GLD, briefly overtook SPY).

SPY was the first ETF in the United States and the last time State Street did anything cool. And now, as of Tuesday, February 18th, the king has officially been dethroned.

On Tuesday, Vanguard’s S&P 500 ETF, under the ticker $VOO, overtook SPY as the world’s largest ETF, boasting $632bn in AUM vs SPY’s measly little $630bn.

Might not seem like a big deal, but this reflects a monumental, decades-long shift in the conversation around individual wealth creation and preservation.

Before ETFs existed, allowing investors to avoid paying management fees to capture the return of a given benchmark or investment style, the only option for fund investment was mutual funds.

Back in the day, most mutual funds were actively managed, generating highly variable returns and just-high management costs. Sure, individual investors could buy individual stocks, but then they themselves are effectively the active managers.

So, in 1975, Vanguard burst onto the scene with founder John C. “Jack” Bogle introducing the world’s first index fund, then called the First Index Investment Trust.

Bogle’s goal was to allow investors to capture returns consistent with that of the broader market at a lower cost than charged by active managers. 

Now, ETFs are one of, if not the single most impactful investments in the wealth creation process for individual investors. 

By stripping away high fees, unnecessary complexity, and the illusion that most active managers could consistently beat the market, he gave everyday people a way to build wealth efficiently. 

I hope Robinhood’s taking notes on what it really means to “democratize” investing.

So, VOO crossing SPY in AUM was a big deal. 

But—even cooler—on February 1st, Vanguard announced fee reductions across 168 of the ETFs it offers, reducing the cumulative fees investors pay by $350mn this year alone.

Vanguard was already a leader in low-cost ETFs, but now it just took the lead even further. Average expense fees for all of Vanguard’s ETFs now sit at 0.08%, compared to the 0.66% average fee on active mutual funds.

In case you were wondering, SPY has an expense ratio of 0.09%, three times as expensive as VOO, with an expense ratio of 0.03%.

The Takeaway?

I’m gonna have to buy a bigger house (yeah, right). My shrine to JPow already takes up one full room; where am I gonna put my new shrine to Jack Bogle?

Anyway, while Buddha enlightened minds, Jack Bogle enlightened wallets. Buddha tells you how to not desire, Bogle gives you a way to achieve those desires. 

In fact, I think Jordan Belfort was quoting Jack Bogle when he said, “I want you to deal with your problems by becoming rich!”

The Big Question: How cheap can passive indexing get, especially when AI eventually gets good enough? Is Jack Bogle the most underrated hero in American history?

Banana Brain Teaser

Previous

Ron is 4 inches taller than Amy, and Barbara is 1 inch taller than Ron. If Barbara’s height is 65 inches, what is the median height, in inches, of these three people?

Answer: 64

Today

If each of the 12 teams participating in a certain tournament plays exactly one game with each of the other teams, how many games will be played?

Send your guesses to [email protected]

❝

In investing, realize that you get what you don’t pay for.

Jack Bogle

How Would You Rate Today's Peel?


Happy Investing,
David, Vyom, Ankit & Patrick