The U.S. housing market is absolutely imploding, but nobody should be surprised. In fact, we were warned way ahead of time that this would happen. When the Federal Reserve told us that they would be aggressively raising interest rates, we all knew what this would do to the housing bubble. It was obvious that home prices would fall, home sales would plummet and home builders would get absolutely crushed. Sadly, that is precisely what we are witnessing. But instead of reversing course after witnessing all the damage that they have caused, Fed officials are insisting that even more rate hikes are necessary. So as bad as things are right now, the truth is that they are going to get even worse in the months ahead.
In recent days we have gotten some new data points, and they are sobering.
We haven’t seen numbers like this since 2008, and we all remember what happened back then.
Yes, just about everyone expected that the housing market would slow down, but hardly anyone thought that things would get this bad so soon.
The following are 5 signs that the housing crash is escalating a lot faster than many of the experts had anticipated…
#1 According to Redfin, the number of homes sold in the United States during September dropped by 25 percent…
Home sales declined the most on record in September as mortgage rates surged and pushed prospective buyers out of the once-hot housing market, according to a new report.
A report from the real estate company Redfin shows the number of homes sold fell by 25 percent and new listings dropped by 22 percent last month, marking the biggest declines on record in both categories — excluding numbers at the onset of the coronavirus pandemic in April and May 2020.
#2 The number of new housing starts in the United States fell by 8.1 percent in September…
Home building pulled back in September, as buyers faced spiking mortgage rates that have made homes increasingly unaffordable.
September housing starts, a measure of new home construction, dropped 8.1% from August, and were down 7.7% from a year ago, according to the US Census Bureau. After a big drop earlier this spring, housing starts had been holding relatively steady up until July when rising mortgage rates spurred more prospective buyers to sit on the sidelines.
#3 The number of buyers touring new single family homes has fallen to a depressingly low level…
Traffic of prospective buyers of new single-family houses plunged to the lowest since 2012, excluding the two lockdown months April and May, and is now approaching even the levels of those two lockdown months, according to data today from the National Association of Home Builders.
The NAHB index for traffic of prospective buyers dropped to 25, about where it was in mid-2007, well on the way down into Housing Bust 1.
#4 Homebuilder confidence has now dropped for 10 consecutive months…
The overall confidence of builders of single-family houses fell for the 10th month in a row in October, as “rising interest rates, building material bottlenecks, and elevated home prices continue to weaken the housing market,” the NAHB report said.
With today’s index value of 38, the NAHB/Wells Fargo Housing Market Index is now nearly where it had been in May 2020 during the lockdown, and below where it had been in February 2007, on the way down into Housing Bust 1.
#5 Demand for mortgages has plummeted to the lowest level that we have seen in 25 years…
Mortgage demand, which has suffered four straight months of declines, fell last week to the lowest level since 1997, as interest rates continued to rise.
Homebuyers’ demand for mortgages dropped 4% for the week and was 38% lower than the same week one year ago, according to the Mortgage Bankers Association. Applications to refinance a home loan fell 7% compared with the previous week, in seasonally adjusted terms. Demand was 86% lower than the same week one year ago.
If you want to thank someone for this giant mess, you can thank the officials at the Federal Reserve.
They knew that raising rates would cause chaos for the housing market, but they did it anyway because they are scared to death of inflation.
But they actually played a major role in causing our inflation crisis. They should have known that pumping trillions of fresh dollars into the financial system over the years would cause rampant inflation, but they just wouldn’t stop.
Now they are trying to fix one crisis by causing another.
And in addition to absolutely crushing the housing market, they are also causing trillions of dollars in losses on Wall Street. In fact, the financial markets are on pace for their worst year since 1969…
So far in 2022, both the stock and bond markets have posted serious losses. To find another market that looks like this one, you’d have to go all the way back to 1969, according to data from BlackRock.
The S&P 500 is down nearly 24% year-to-date, and the Bloomberg U.S. Aggregate Bond Index has surrendered about 16%. Should both indexes finish the year in the red, it would be the first time that has happened in decades.
If officials at the Fed keep hiking rates, the markets could go down a whole lot more.
At this point, Bill Holter is warning that we could soon see “a crash that will make 1987 and 1929 blush”…
In closing, Holter warns, “The action you are seeing now is exactly what you saw in 1987, and this is what you saw in August and September of 1929. This is what happens prior to crashes. It’s massive volatility both ways . . . people are losing both ways. The longs get stopped out on the downside, and the shorts get stopped out on the upside. Then, the whole floor gives way, and that’s where we are. We are right on the doorstep of a crash that will make 1987 and 1929 blush. . . . Many people are going to lose everything overnight.”
Time will reveal whether Holter is right about this or if he is wrong.
But without a doubt, it certainly wouldn’t take much to push us over the edge.
Everywhere you look, economic conditions are getting worse, and the stage is being set for the sort of historic meltdown that I have been relentlessly warning about.
If officials at the Federal Reserve had any sense, they would stop raising rates immediately.
Unfortunately, they aren’t going to do that.
So much more pain is coming for the housing market, and this new crash could ultimately be even worse than what we experienced back in 2008.
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Article cross-posted from The Economic Collapse Blog.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
Once again the democrats have brought the American economy to it’s knees, just like 2008.