New home prices are falling nationally, existing homes regionally. 
Cooling Fast
John Burns reports The Housing Market Is Cooling Fast.
- Resale prices are down compared to one year ago in 53 of 150 markets we track, with declines spreading beyond Texas and Florida.
- New home prices, including builder concessions and incentives, have fallen -1.5% versus last year as builders have been caught with too many completed, unsold homes for the first time in many years.
- Resale prices have risen in 65% of the country over the last year, so pay attention to local dynamics.
Price Drops Spreading
With new home construction exceeding job creation in most areas, the supply of newly built homes is outpacing new demand. Homebuilders are lowering prices and payments to find demand.
Price weakness has expanded across the Southeast, Southwest, and West Coast. Even some markets in the Midwest and Northeast, where tight supply previously supported strong pricing power, are seeing price appreciation slow rapidly. This geographic spread signals a widespread shift in pricing power.
New Home Prices Net of Incentives
Fewer Jobs Mean Fewer Homebuyers and More Renters
Employment growth has slowed, and some markets are losing jobs compared to last year.
Where jobs are still growing (but slower than before):
- Charlotte: +2.2% job growth YOY
- San Antonio: +2.0% job growth YOY
- Salt Lake City: +2.0% job growth YOY
Where jobs are declining:
Bay Area and other coastal markets are seeing YOY job losses.
The high-income sectors that typically drive new home purchases (Information, Financial Activities, and Professional and Business Services) are experiencing the steepest losses. When high-income workers lose jobs or face uncertainty, they’re less likely to buy homes.
Our analysis shows that rental market leasing through June was strong, despite the slowing economy and job growth. We believe most of the demand right now is for rental homes.
Mish Comments
The chart are year-over-year.
Burns does not list gains or losses in the first half 2025. The Case-Shiller indexes shows acceleration to the downside.
The Housing Top Is Likely In, Case-Shiller Home Prices Drop Again
On July 29, I noted The Housing Top Is Likely In, Case-Shiller Home Prices Drop Again.
The Case-Shiller Home Price Index declined another 0.3 percent in May.
The Decline Barely Registers
- From the peak, National is down 0.9 percent
- From the peak, 10-City is down 0.6 percent
That’s three consecutive monthly declines for Case-Shiller.
As with the Burns Index, year-over-year Case-Shiller prices are still positive.
I do not accept the NAR report that shows prices still rising.
On July 23, I reported Existing-Home Sales Decline 2.7 Percent, Median Price New Record High
Hooray, higher prices? That’s the message from the NAR.
That alleged Median Price Record did not happen. The NAR does a terrible job at seasonal adjustments (if it tries at all).
Click on above link for discussion. Expect rapid decline now in NAR median prices.
What About Rent? PCE?
Burns offered this pertinent comment “Our analysis shows that rental market leasing through June was strong, despite the slowing economy and job growth.“
If rent and Owners’ Equivalent Rent remain strong, the CPI will remain strong.
The Personal Consumption Expenditure (PCE) price index is the Fed’s preferred measure of inflation.
The PCE overweighs medical expenses whereas the CPI overweighs shelter.
Trump seems desperate to lower drug prices, but medical services, not medical commodities are the big medical price driver.
No Improvement in the Fed’s Preferred Measure of Inflation for 8 Months
On July 31, I commented No Improvement in the Fed’s Preferred Measure of Inflation for 8 Months
Core PCE is up 2.8 percent from a year ago, no change in 8 months.
The number to beat for July is 0.17 for both the PCE and Core PCE. Readings above 0.17 percent will result in an increase in the year-over-year numbers.
It was on this basis, and CPI medical care costs, I expected a rise in year-over-year PCE in the latest report.
There is not an easy-to- beat set of numbers until January 2026. Thus, I expect to see year-over-year core PCE back above 3.0 percent before January unless all hell breaks loose economically.
All hell could break loose, and by that I mean collapsing demand and job losses coupled with price declines.
But that’s betting on a trifecta, and a jobs market Trump will scream about.
For discussion, please see Payroll Disaster, Jobs Rise 73,000 but Massive Negative Revisions
In 2007, there were over 4 million homes for sale. Today? Just 1.53 million. And the U.S. population has grown by over 40 million people since then. That’s the math.
So what does that mean? People are not moving around as much? Might that be due to high housing prices or perhaps lack of available work?
And how much of that 4 million number was home flipping, which I recall was a big industry back then?
The entire housing market had a heart attack when the SP500 fell in April due to tariffs. The numbers presented in this article reflect that dip.
Since, the market has bounced back nicely in the big cities where people are returning to the office. Big city suburbs are strong.
The pandemic locations are falling hard. I feel sorry for people that bought in pandemic locations. They are so screwed. Stay tuned.
It’s about time that “normal” prices return. Most of the covid increases were not justified by incomes. If young people are priced out of housing for much longer, you can bet on more and more communists being elected.
Homes are too expensive for young people so why would they stay? The illegal immigrants were incentivized by the moron telling them to ‘surge to the border’, but then his dementia kicked into high gear and needed to shake hands with people that weren’t there.
All those people need a place to live, so why not 20 to a house, eh?
No problem and if you say otherwise, well, you’re a racist.
Obviously, the only solution to this is for New York to erect a socialist so he can open government run grocery stores.
The mind of Democrats….. an endless well of stupidity.
The county I live in (Hampden County, Mass.) still has a heated market with no let up in sight. Housing inventory is just too tight and has been for years.
Population of the county is 460,000. Currently there are 800 listings on realtor.com with 469 of those 800 being single family houses. 1 house for sale per 1000 population.
Compare that to Austin TX which has about twice the population (989,000). 7954 real estate listings; 5306 of those being single family houses. 5.3 houses for sale per 1000 population.
Yes, real estate is local, but I’m not allowed to point that out over at someone else’s blog (starts with “Wolf”) because it’s considered ‘real estate promotion’. He’d only allow my comment if I paid for ad space.
I’ve given up on that site, Mish covers broader topics and lets us banter away for the most part.
It’s all very simple really. The low interest rates during the pandemic allowed buyers to bid up the price of homes because they could afford the payments. At the same time, the low rates enticed many homeowners to refinance their current mortgage, and thus a huge amount of homeowners have “golden” mortgages.
So, home prices skyrocketed from mid 2020 to spring of 2022 when mortgage rates got back to around 5.5 percent. This, along with the fact that homes had gotten 50 percent more expensive (in asking price), caused the payments to get way out of reach for many would-be home buyers.
Since then, the number real estate transactions have cratered, while price held up for a while, but, is now falling. This was because sellers didn’t want to sell (leaving their “golden” mortgage for one at the current rates of 6-8 percent in the last few years, and buyers simply couldn’t afford it, with both high prices and high rates.
But, everyone focuses on the rates. Whereas the real problem has been that prices overshot the mark, because buyers could “afford to overpay” with the golden mortgages reducing their monthly payments to a level that they could withstand.
So, now, finally, the typical turnover in homes is finally happening. Many that had waited to list their home are tired of waiting and have put their home on the market. Listings of pre-owned homes are up dramatically, but, buyers are still scarce.
Therefore, the inevitable consequences of “too much supply, not enough demand” are about to appear, and home prices in many areas will begin to fall.
Sellers will have to learn to accept 5 to 10 percent less than what they thought they were going to get and buyers need to negotiate hard, while they have the market in their favor.
Rumor has it banks are not foreclosing and keep offering extensions so as to not crash the market.
I have read something to auto repos.
Student loan payback just kicked in. For most it means lower credit scores and higher insurance due to the credit score.
January will be fun. All these people skipping meals to pay bills, over loaded up on auto loans and credit card debt and mortgages. All those sweet people using buy now pay later Like Klarna for food.
Boom they hit the wall.
There are so many tiny little factors that nothing is simple to predict anymore.
I spoke to a NYS insurance agent and those delivery people like Doordash should have commercial, like cabbies, licenses.
Way too many are older folk just trying to keep up on bills. At least where I am.
Late stage Capitalism in the US is the best soap opera to watch unfold. Especially with the WWE leader and damn near everyone on the grift.
Thank god I am low rent but will enjoy when my neighbors grovel.
Solar blow off facing away from Earth may cause Northern lights 8/8.
What bothers me is how do we get Northern lights without some satellite loss?
As if the peons would be notified anyway.
It’s not a rumor, it’s a fact. Both the Biden and Trump administrations have ben in cahoots with the banks to prevent foreclousre by any crooked method necessary. This isn’t fair to the responsible and the young.
Source?
This is a good thing. Houses will be more affordable now.
But what is needed is a 1500% decline in prices. Trump said a 1500% decline is possible!
Sure I will pay you 14x the value of my home to “buy” it from me, is that the way to make my casino go bankrupt?
Affordable for whom?
Not those people already working three jobs.
Hey, the median price of a house in my CA county is $2 million. Is that too high?
That’s great news. Now, let’s get us a multiplier of at least 4 in front of those YoY percents.
Huntsville still rocking it baby! This city is the place to be, its on 🔥
Sacramento, CA is still hot. See some minor price decreases, but still very strong.
…especially if you have more than 3 teeth. You’ll live like a king!
Government jobs is the only explanation.
culural challenges
foxconn/apple in india
https://restofworld.org/2023/foxconn-india-iphone-factory/
tsmc in Phoenix AZ
https://www.chinatalk.media/p/culture-clash-in-tsmcs-phoenix-fab
The next generation is completely frozen out of the market, even if interest rates go to zero.
Prices need to drop, a lot, or the next generation won’t be able to buy, even with interest rates at zero.
I’m closing today on a 1 acre lot close to Lake Weiss. It’s WAY cheaper than Lake Guntersville.
With Huntsville being so hot, that’s great for North AL.
Mosquito and damp heaven.
We have some rich folk that bought the old lake homes and tore them down to rebuild. Now there are problems with sinking, plus all those old lake homes ran sewage into the lake no septic.
Toxic algae blooms every summer.
I am a current 50 year old homeowner. Bought this latest house in a Midwest state for 179,900 5 years ago @ 2.25% 30 yr. I could sell this home all day long for 100K more than I paid for it. The problem is I cannot afford to go anywhere else. The 100K I would make on this house would be quickly eaten up by the increase in the next one and the 6 or 7% interest.
My wife and I are going to hang tight until 55, sell, invest the proceeds, and go to a senior housing type apartment.
I will not miss ridiculous increases in homeowners insurance and property taxes. I think homeowners insurance costs will eventually drive folks from their homes. Mine has doubled in 5 years with only one 10K hail claim.
Tennessee, some nice laws there too.
I spoke with a realtor that moved from Pittsburgh to there.
Stay away from the cities but lot’s of nice rural stuff.
That is why they build TOWER BLOCKS like Europe.
The ESTATES took too much land.
Plus they are really fed up with the situation and very ready to vote communists in.
I have been waiting years to buy more rental properties but the numbers don’t make sense especially with insurance and property taxes rising like crazy. The last two months my email inbox has been inundated with municipal bond issuances, every county in Texas, Tennessee, Wyoming and other no state income tax bonds I follow are issuing like crazy. I keep thinking, who is going to re-pay these?
Here are some examples:
City of Mesquite, TX – $30 million
Roosevelt ISD – $56.9 million
Wyoming Community – $78 million
City of Godley, TX – $60 million
Cedar Hill ISD – $29 million
And the large cities and counties are issuing in the hundreds of millions. The answer to who will pay will be tax payers and mostly property owners.
And with Trump deporting the cheap labor, tariffing lumber and other goods all over the world and other dumb things, I don’t see how housing gets cheaper. The mere fact labor and materials will be more expensive means insurance rates have to go up. All the bond issuances mean property taxes need to go up as well.
Every night on the news there is a sob story about some old woman losing her home because she can’t afford to pay the property taxes, wait till there are 80 million seniors on social security unable to pay! Especially now with SNAP and medicaid cut.
It all sums up to one question, got an exit strategy?
Clancy’s Funeral Home & Crematorium. The beer is on me.
Dude there was a funeral home for sale cheap in Tennessee.
Spacious building and lot with much green.
When I checked there was an offer on it but I may check again later.
Life without parole.
Prison planet?
Or MARRIAGE!
But the demographics and debt from the worldwide baby boom means looking for greener pastures/exit strategy, if one is looking at the developed world anyway, is quite difficult if escape is the idea. Clean-ish shirt/dirty-ish drawer and such. And if anyone has paid attention the key to happiness is to be around family and friends, granted eating and having a roof over one’s head matters too but leaving family and friends in lieu of finding a way is unlikely for most people. The solution set seems to be quite narrow without acceptance of a lower standard of living due to debt (as you mentioned is growing like a weed in every nook and cranny).
Simply put, no one wants anything to really change…they just wanna wish that the debt will somehow take care of itself, their home values stay high until they sell or if they intend to use cash out equity, and their stock portfolios go just one way. That is, with moral hazard off the charts since 2009 every politician, citizen, homeowner wants a check valve on their enrichment, nearly all of it passive. I get it but we won’t have policy change and progress until there is a market reckoning.
That’s very well said Bill and makes a lot of sense.
“And if anyone has paid attention the key to happiness is to be around family and friends,”
Wow was Bewitched just airing when you thought that?
The key to happiness to to be meager and not want shiny bells and whistles.
Family and friends will be the first to screw you over.
An old woman losing her home over bs property taxes is a sob story? This crap needs to end yesterday.
Unfortunately this was how Prop 13 got passed in California and how similar legislation got passed here in Florida.
It was all about keeping granny in her home.
That is the about the only thing that was well done in California and shocking that other states don’t try to push this as well. It was a voter approved proposition, but this should be done around the country. Property tax dependent states like Illinois, New York, Texas, etc would then be forced to manage their budgets.
[rotflol] Stop the crazy talk! Prop 13 created many problems and introduced many inequities.
In response, governments turned to fees for everything to bring in revenue. These fees are not penny ante, they can reach into the many thousands of $$.
Government will always find ways to extract the revenues it needs from the people it services.
It did the EXACT opposite of what you are saying.
Instead it created 2 classes of people.
A) One who has owned their home for decades and pays a pittance in taxes. They ABSOLUTELY don’t care what the budget is or what the proposed property tax increase is because they are shielded from it.
B) One who bought fairly recently and pays roughly the full market rate. In fact these people are over paying by far to cover up for money not gotten from person A. They’d love to force cities to balance budgets etc but because person A doesn’t care there isn’t enough political power to change anything.
In a nutshell it’s like person A and person B go out to lunch and person B has to pay. Of course person A doesn’t care what they order or what the cost is because person B is paying.
Anyone who claims they are for fairness in taxes (or for things in life in general) absolutely can’t support Prop 13 because 2 identical things get taxed differently. That’s the anti-theses of the idea that every should be equal and treated equally.
I kind of agree. I have owned my Florida home for 33 years. In the 1990s, FL passed the ‘Save-our-Homes’ initiative which capped property tax increases to 3% max per year. I pay $3100 in property taxes in a really nice neighborhood. My neighbors that have bought similar homes to mine with the past 3 years are paying $8,0000. I’m pretty happy, but I don’t think it is fair. My taxes also cover public-school expenses even thought my wife & I don’t have kids. It comes with the territory to make a decent community.
100 percent correct. prop 13 an abomination. though CA is still my favorite state. lived in many places. the weather and beauty in CA is stunning. i miss it.
I wrote that “Prop 13 created many problems and introduced many inequities.”
You appear to agree with this statement, which means it is not an “EXACT opposite” of what I wrote. Lay off the suds or smoke?
See CA Prop 19, passed in 2020, which changed inheritance rules and upset a lot of people. Two attempts to obtain enough signatures to repeal it or change the inheritance changes have failed in 2022 and 2024.
It’s a sob story because these people, especially the seniors that have been around for decades, should know that you have to pay taxes or you end up losing your stuff and maybe end up in prison.
I hate taxes and I loathe socialism. I am the lone person here that calls for the elimination of medicare and social security and am frequently attacked for it. Sorry, but all this socialism is killing the country, sadly it will take a bankrupt social security and medicare in 2030 to open people’s eyes then the pain will be 10x worse than doing something slowly and methodically now.
And as TexasTim points out, seniors already get so many tax breaks and free handouts (SS & medicare) that you have to wonder how incredibly disorganized these people are to not have the funds to pay property taxes.
Yeah, I’d love for property taxes to go to zero too but no one wants to give up anything so it’ll never happen. Just more bond issuance for more socialism and more taxes to pay for it. Rinse & repeat sob stories until it all goes bankrupt.
I hate the taxes too. Purchased two scooters for the wife and I. They weigh 220 pounds and 243 pounds respectively. They do NOTHING to degrade the road. They get 125 mpg. My tax bill on these was 200 bucks plus a “wheel tax” for 20 more dollars, then a license plate fee, etc. Total was 340 bucks. One scooter is a 2008 and has had taxes paid on it how many times in 17 years? I am fing fed up at this point with all of it.
You well know that Medicare isn’t free. Current standard monthly charge is $185 but is greater if you have higher income.
The price for Medicare Supplement plans also increases yearly.
—
Oh the horror! Seniors have to pay $185 for unlimited health care!
The average worker (like me) is paying close to $2000 for health insurance and then you have to fight every damn medical claim and pay copays that make the insurance worthless. It’s so bad CEO’s are getting gunned down because of it.
Yeah, I want medicare too and will be happy to pay $185 month, it’s peanuts to what I’m paying now but we all know it’s not sustainable.
[sniff] I feel so sad for you! Put in your time and you’ll be able to reap the benefits also. Unless you actually effect that “exit plan” you constantly refer to. Medicare only works in the US. So sorry.
But smart people often continue to pay for Medicare even if they live abroad, so that they can return to the US for major medical issues.
Well the cost of medical care anywhere outside the US is 1/10th the cost so I’ll be gloating when it all goes toast and you’re left holding the colostomy bag.
I had a colonoscopy a few months back. 100% clean and the photos look real good! Doc was impressed.
Yesterday, I did a 10 mile hike/jog while climbing 2k feet.
Yes, costs are lower elsewhere but do you really want to get a heart operation in Turkey, for example?
Given your claimed success and therefore likely high income, you will probably have to pay a lot more than $185 or whatever the base number is when you cross the 65 age line. It could be a number like $600-$1000/month.
Will that work for you?
At the very least Granny should have to take out a reverse mortgage to pay her taxes. Once the taxes exceed her equity, she has to move and the home is turned over to the bank to sell.
Or, and I’m just spitballing here….. we stop re-electing people that make government bigger.
I know…. that’s crazy talk.
republic of plato layed it all out thousands of years ago. assholes elect assholes. amerikans are assholes. look around the world and see how stuff works. who are we gonna bomb tomorrow with our force for good us navy?
People almost always do what benefits themselves/their families, whether or not they are Americans. They also vote for politicians that make promises to advance those interests.
Consider this a late life lesson for yourself.
Up on the next street a higher end now historical street sits a house. A couple of new windows but been boarded over since I moved in in 2009.
Same ass councilman I mentioned said that some guy bought the house to turn it into apartments. He told the councilman he put everything he had into it.
A judge living across the street did not like that so house gets abandoned for taxes.
Much later the ex head of SWAT and former council man buys the house and wants to turn it into a garage because he lives across from it.
It can’t be done.
Then he sells it to someone else they started something but it has sat sealed up for four years.
It is not just taxes.
Who is dumb enough to dv a true story?
You were the original judge right?
Greasy, very GREASY.
I agree. And dimwit TACO wants the Fed to slash rates. Just what we all need, higher home prices without a meaningful 20-30% decline.
America is the finance country. Fast money, no product and false promises. Couple that mismanagement and crazed spending and you have a recipe for disaster.
Income from actual work is taxed more than any other form of income. Being a useless rent-seeking parasite is fiscal policy.
“Every night on the news there is a sob story about some old woman losing her home because she can’t afford to pay the property taxes, wait till there are 80 million seniors on social security unable to pay! Especially now with SNAP and medicaid cut.”
I spoke with the local head of the city council because the county has a disabled person tax exemption BUT the household has to have under 16k. The median average for the county is 45k.
He told me this sad story about some old woman he knew and visited who took great joy in caring for her house. Then she went into a home and the state took it for taxes.
He said he stops by and it is run down falling apart.
Then the city council preceded to vote themselves a raise.
The guy did not do a damn thing to aid her nor the community at large. All these working class factory homes, many built by master craftsmen because this was a worldwide furniture area, are rotting away.
The street below me was a nice little one where they ran the Memorial day parade yearly.
Now it is run down and filled with dope dealers.
And the community is fully aware.
No more parades down that street.
how i found freedom in an unfree world. read it.
For homes to be affordable again, prices would have to crater.
At the turn of the century, my home value was about 1.5x my annual gross income. It’s now 25 years older and sitting at 2.5x, though I’m now a principal engineer in high tech and not a junior one as then.
As always with real estate it depends on location, location, location.
In your example, turn of the century was 25 years ago now. By inflation alone (roughly 3%) the cost of the house should have doubled (and so should your salary if you did nothing but get COLA raises).
On Wolfs site, he shows major housing markets around the country and his charts go back to 2003. When you look at them, a very large number of markets aren’t much more than double the 2003 price and thus a small fall in prices (20% or less) would put them in line with inflation since turn of the century. Of course there are some that are more than triple the price and those markets are indeed still in bubble territory and could fall 40% to get in line with turn of the century numbers.
Given how far we’ve risen nationally, until there are no green or yellow dots we haven’t actually seen anything meaningful. Regionally perhaps but when I see what my friends in Seattle have seen in the last 5 years, if it’s still going up 4% there annually nothing materially or structurally has changed. Their perceived invincibility would deserve nothing short of complete wipeout by AI but I can’t wish that to happen. Just return to some sort of sanity because the green dots drive a lot of policy and it’s currently flawed.
Mish please read/watch these:
https://www.independent.org/article/2007/03/15/the-trillion-dollar-defense-budget-is-already-here/
That is from 2007. We need a new analysis.
This next article provides a little context for the subsequent interview.
https://www.marketplace.org/story/2006/05/24/negroponte-given-power-waive-sec-rules
https://corbettreport.com/interview-1479-catherine-austin-fitts-explains-the-financial-coup-detat/