The housing market has officially lost its grip. For the last few years, it levitated on low inventory and asset-charged demand, even while affordability cratered. But now, the concrete’s cracking. Home prices fell again in April, the second straight monthly decline per Case Shiller. It’s not a panic. It’s worse. It’s resignation. Sellers are surrendering.
Supply is shifting fast. Existing listings jumped this spring in a way that does not match the economic backdrop. It’s not recession driven. It’s long-postponed necessity. People held off selling because of 3% mortgages. Life eventually overrides rates. That delay is over. Listings are filling up.
Builders already delivered a wall of new supply. Completions surged through 2023 and early 2024, hitting levels not seen since the mid-2000s. That’s hitting now, right into a demand freeze. Mortgage rates sit just under 7%. Monthly payments on median homes have crossed $2,570. Income growth hasn’t caught up. People are opting out.
Builders see the damage. NAHB sentiment just dropped back near cycle lows. Public builder stocks are soft. Forward-looking permits and starts are rolling over. Even the big players are trimming exposure. They see it before it hits the headlines.
Prices are retreating, but not fast. The median home price is still up year over year in some areas. But the shifts are broad based. Sellers are dropping asking prices. Incentives are back. Time on market is lengthening. It’s not a collapse. It’s erosion. Quiet. Widespread.
Construction employment hasn’t fallen yet. That will lag. Labor hoarding has been sticky post-pandemic. But with fewer groundbreakings and slower permits, that softness is coming. Residential fixed investment is already dragging on GDP. That impact will spread.
Households are feeling it. Savings rates are ticking up. That’s not a choice. That’s preparation. When homes fall out of favor, consumption usually follows. Housing is the core asset for most Americans. When that falters, sentiment and spending do too. We’re seeing the edges of that already.
The takeaway is not a crash. It’s an unraveling. Piece by piece. Supply up. Demand down. Prices rolling. Activity slowing. The glow has faded. The unwind has started. And the real economy is just beginning to notice.
Sources
https://x.com/BobEUnlimited/status/1938901745586798786
https://x.com/VladTheInflator/status/1939025148616876214
https://x.com/texasrunnerDFW/status/1938599073965031769
https://www.mortgagenewsdaily.com/news/06242025-case-shiller-fhfa-home-prices-prices-apprecia