South African billionaire Elon Musk, one of the richest people on the planet, warns that the turmoil in the US banking market may also spread to the real estate market, reports Markets Insider.

“This is by far the biggest issue looming on the horizon,” he wrote on Twitter, the social media platform he bought last October. “Mortgage, too,” he added.

Musk made the comments in a post by analysts who write the Kobeissi Letter, a weekly newsletter of top financial news for investors, in which they warned that repeated hikes in key interest rates by the Fed, the US central bank, could lead to a recession.

In their latest bulletin, cited analysts noted that a record $2.5 trillion in housing-related debt is coming due over the next 5 years, which could create serious problems for borrowers and businesses.

An increase in base interest rates was also the event that led to the sudden collapse of Silicon Valley Bank (SVB) on March 10.

A brief explanation of the SVB crash

SVB has been one of the biggest beneficiaries of the boom in Silicon Valley over the past few years. As huge venture capital was invested in SVB-funded start-ups, billions of dollars came as deposits to SVB.

The bank was sitting on a mountain of cash – from 102 billion dollars, it reached 189 billion dollars in deposits, funds that needed to be placed somewhere.

Seeking yield in an era of ultra-low interest rates, the bank has invested in a $120 billion portfolio of securities, including $91 billion in mortgage-backed bonds with a fixed interest rate of just 1.64%, holding cash for more than a decade and facing losses, if interest rates rise rapidly.

Since this is exactly what has happened to interest since last year, the value of the portfolio has fallen by $15 billion, which is almost equal to SVB’s entire capital.

Elon Musk, a harsh critic of rising interest rates

But this new warning from Musk about the US housing market should also be seen in the context of the fact that the billionaire has repeatedly criticized the Fed’s actions related to benchmark interest rates at almost every available opportunity.

Musk blamed the Fed for Tesla’s spectacular stock price crash last year, a slump that wiped tens of billions of dollars from his personal fortune and made him the richest man on the planet.

A rise in base interest rates leaves less money in the market, hence less money to invest in the stock market, but it also makes traditional investments in deposits and bonds more attractive compared to investments in financial markets.

But Musk isn’t the only one who thinks the US housing market may be in trouble.

Concerns about the US housing market

Analyst Genevieve Roch-Decter, CEO of consulting firm Grit Capital, wrote on Twitter a few days ago that the collapse of SVB was just an “epiphany” and mortgages are a “much bigger ticking time bomb” on banks’ balance sheets.

Two Wall Street titans have issued similar warnings in recent days.

Bank of America said mortgages could be the “next domain” to collapse for US markets and the economy, while investment bank JPMorgan suggested a sudden surge in mortgage defaults could cause $38 billion in losses in banking sector.

Analysts around the world have been watching the US banking market in crisis with concern since its sudden collapse in 2007 triggered the worst global economic crisis since the interwar Great Depression.