Is 2025 the New 2007? Market Signals, Mortgage Parallels, and How to Prepare

Is 2025 setting up like 2007? With mortgage rates back at 6.5%, softening home sales, and market behavior echoing a familiar double top, traders should stay alert—not afraid. This article compares today’s macro conditions to pre-2008 signals and offers a practical “hurricane checklist” for investors. From holding cash to stress-testing your portfolio, it’s all about preparing for multiple scenarios—not predicting a crash. History may not repeat, but it certainly rhymes.

📉 Echoes of 2007? Or Just a Storm on the Horizon?

GAR Capital | Market Reflection & Preparation

🧸📉 This isn’t a panic post. It’s a possibility check.

What keeps me up at night isn’t what is happening—it’s what could. And right now, there’s a scenario quietly forming that feels eerily familiar.

🕰️ Let’s Rewind: 2007 Setup

The chart speaks for itself (see above). The S&P 500 in 2007: • Dropped in Q1 • Bounced back hard • Rolled over into a double top • And then… 2008 hit. We all know what happened next.

Here’s the kicker—in June 2007, 30-year fixed mortgage rates were at 6.53%, the highest in 10 months. Sound familiar?

🏠 2025 vs 2007: Mortgage Déjà Vu?

We’re now five years removed from the COVID low-rate era.

I’m not a real estate expert, but I’m wondering: • How many adjustable-rate or teaser loans are still floating around out there? • How many folks are sitting on low-rate mortgages but high-cost lives?

New home listings are rising, but sales are softening. That doesn’t scream crash—but it’s definitely a cooling trend.

Is this 2007 all over again? Probably not. But is it a yellow flag? Yeah, it might be.

🧭 My Personal “Pulse Check” Indicators:

Forget the spreadsheets for a second—here’s what I really watch to gauge the economy: 1. Airports – Are people still flying, booking trips, living their lives? 2. Malls – Are people still out shopping, spending, moving around?

If both are packed, the economy is likely still chugging. If they’re quiet, something’s shifting.

🧮 Then & Now: Economic Snapshot

June 2007: • GDP growth: 0.7% (weakest in 4+ years) • Housing investment: ↓ 19% • Consumption: ↑ 4.4% • Unemployment: 4.4% • Fed Funds Rate: 4.33%

May 2025: • New home sales: ↑ 10.9% (highest since Feb 2022) • Citi: “Housing is still weakening beneath the surface.” • Unemployment: 4.2% • Fed Funds Rate: Also 4.33% • Fed tone: Cautious, watching stagflation and trade policy risk

So yeah, different drivers, but very similar rates, unemployment, and asset pressure.

🤔 What Do We Do With This?

We don’t predict—we prepare. I still believe the S&P 500 hits all-time highs in July. But if we get a repeat of 2007’s market curve? You want to think in scenarios, not absolutes.

Here’s what I suggest:

✅ Your Market “Hurricane Checklist”

Think of this like tracking a storm that’s far out at sea. No panic. Just prep.

🔹 Hold Cash: Not just for downside protection, but opportunity. 🔹 Audit Your Portfolio: • Would you still hold these stocks 5 years from now? • If your account drops 20%, would you panic or double down? • Which stocks would you want at a 30% discount right now? • Are you diversified or are you “all in” on one idea?

🔹 Harvest Gains Wisely: What are you holding that’s already up big? Trim a little. Lock it in.

🔹 Set Goals for a Sideways Market: What if we don’t crash… but also don’t go anywhere for 2 years? Can you stay focused?

💡 Bottom Line:

History doesn’t repeat, but it rhymes.

We’re not forecasting collapse—we’re just reading the signs and doing the work to be ready.

And pressure? It only shows up for those who didn’t prepare.

Keep your head clear. Your checklist ready. And your plan locked in. Happy trading, - Carlos G GAR Capital

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