Business · concept
Wikipedia (opens in new tab)

Michael Burry on Real Estate

Mixed Mortgage Stance (strong)

TL;DR

Michael Burry is currently bullish on mortgage giants Fannie Mae and Freddie Mac common stock after decades of criticism.

Key Points

  • He famously predicted the collapse of the subprime mortgage market, leading to massive profits in the run-up to 2007.

  • He stated that he holds "good size" common stock positions in mortgage giants Fannie Mae and Freddie Mac as of late 2025.

  • His investment style relies on a traditional understanding of value, emphasizing a margin of safety in his stock picking.

Summary

Michael Burry, famous for predicting the 2007 subprime mortgage crisis, has demonstrated a complex and evolving stance on real estate-related assets. Historically, his notoriety stems from successfully shorting the residential real estate market by purchasing credit default swaps on vulnerable mortgage-backed securities, a position that required significant conviction over several years. He was severely critical of the market practices leading up to the 2008 collapse and faulted regulators for not heeding warnings from outside the established circle of advisors.

More recently, however, he has signaled a positive outlook regarding specific government-sponsored entities (GSEs) tied to housing finance. He disclosed owning a "good size" position in the common stock of mortgage giants Fannie Mae and Freddie Mac, anticipating a re-listing following their post-crisis federal conservatorship. This shift suggests a belief that the structure surrounding these assets may finally favor common shareholders, contrasting sharply with his prior bearish stance on the underlying mortgage market quality.

Key Quotes

"This is a very interesting chart, as household stock wealth being higher than real estate wealth has only happened in the late 60s and late 90s, the last two times the ensuing bear market lasted years. "

... I think the whole thing is just going to come down, and it will be very hard to be long stocks in the United States and protect yourself. And so that's why I decided to get out.

Frequently Asked Questions

Michael Burry's current public position is mixed, marked by historical criticism of the broader housing market but recent bullishness on specific mortgage-related entities. He reportedly holds significant common stock in Fannie Mae and Freddie Mac, anticipating a positive outcome from their potential re-listing.

Yes, Michael Burry was among the first to predict and profit from the subprime mortgage crisis. He made millions by purchasing credit default swaps that paid out when the risky mortgage-backed securities collapsed, a feat chronicled in 'The Big Short'.

No, his sentiment on the sector has evolved; while he was heavily critical of subprime mortgages before 2008, he recently became positive on the common shares of the government-sponsored mortgage giants, Fannie Mae and Freddie Mac.