New and existing-home sales collapsed in 2022 and have gone nowhere since.
Cycle Peaks
- New Home Sales: December 2021 at 816,000 now 622,000
- Existing-Home Sales: January 2022 at 6,340,000, now 4,020,000
Decline from Peak
- New Home Sales: 23.8 percent
- Existing-Home Sales: 36.6 percent
Since January of 2023, over three years, sales of new and existing homes has gone nowhere.
This is despite falling mortgage rates.
Between October 2023 and February 2021 Mortgage rates dropped from 8.03 percent to 3.00 percent.
In October 2023, new home sales were 689,000. In February 2026, new home sales were 641,000.
That’s a 7.0 percent decline in sales with mortgage rates falling two fill percentage points.
Case-Shiller Home Prices
Case-Shiller measures sales of the same home over time. Prices have exploded.
Case-Shiller is the best measure of price, but it lags by about 5 months.
Why Sales Are Down
- New buyers cannot afford the combination of high price and mortgage rates
- Others, who would like to move, don’t want to trade in a 3 percent mortgage for a 7 percent mortgage
The housing market is broken on all fronts with no solution.
Related Posts
May 11, 2026: Existing-Home Sales Flounder for Over Three Years, What’s Going On?
Sales have gone nowhere for over 3 years. Median price keeps rising.
May 26, 2026: National Home Prices Decline for the First Time Since July 2025
I am pleased to report a month-over-month home price decline. But don’t get too excited.
May 30, 2026: New Home Sales Decline 6.2 Percent, Pressure on Builders to Lower Prices
Sales are mostly stable in a broad range, but inventories are rising and consumer sentiment souring.
Correction
Between October 2023 and February 2021 Mortgage rates dropped from 8.03 percent to 3.00 percent.
Correction
Between October 2023 and February 2021 Mortgage rates dropped from 8.03 percent to 3.00 percent
You have to take into account the affect property taxes are having on the market as well, not just interest rates. Here in Detroit metro I’m paying close to 2.5% effective property tax rate on our home we bought at the end of 2024. 250k house with 6400 yearly in taxes. That’s just insane honestly. 1/3 of my mortgage is taxes and insurance. Meanwhile my “grandfathered” neighbor with an identical house to mine is paying half the taxes I am for the same services. What a ripoff.
Broken with no solution? Look at this as part of the new, improved Lower Living Standards. The solution is HIGHER PRODUCTIVITY and an END TO MONETARY EXPANSION.
It is really simple. The price of a new house is directly related to perceived affordability – ie. the monthly payment. Affordability includes the interest rate. As interest rates climb, prices drop. As interest rates lower, prices increase. This is also true of any government’s inputs. It is the monthly payment that is the deciding factor, not price or interest rate.
If you can’t afford it, you can’t have it.
Excuse me, mortgage rates at 2% in 2023? If you’re opening premise is so far out, the rest has to be garbage.
I did read it twice, but still can’t see what I’m missing. It must be me, I have great faith and Mish.
This reads as an AI generated post
I was confused too. I’m sitting at home with a headache so I don’t exactly trust my cognitive abilities right now but here’s the passage I can’t process. Copy paste:
“Between October 2023 and February 2026 Mortgage rates dropped from 8.03 percent to 2.00 percent.”
I assume it’s swapped and will be fixed shortly.
Correction
Between October 2023 and February 2021 Mortgage rates dropped from 8.03 percent to 3.00 percent
If you want to drop housing prices, you don’t increase the means-of-payment money supply like Bernanke did for 4 straight years. That was the tightest money policy since the GD.
The insidious thing about the commercial banking system is that an increase in time deposits depletes demand deposits dollar for dollar.
Chat gpt can’t even prove double-entry bookkeeping on a national scale.
1961: Edwards: “It seems to be quite obvious that over time the “demand for money” cannot continue to shift to the left as people buildup their savings deposits; if it did, the time would come when there would be no demand for money at all”
For the past few years I relied on Redfin.com to get an idea of what housing prices were in various states I was considering retiring to and where those prices were headed.
Redfin just released April sales figures. If you go to redfin.com, under the menus, select: Buy -> US housing market. Once there, you can enter a city or state to see all sorts of sales data, nicely graphed.
Bernanke didn’t use the Greenspan put. He used credit easing.
The precipitous drop in velocity in the last half of 2008 was also due to the fact that banks don’t lend deposits. The ratio of TDs to DDs hit an all-time high back then.
Remunerating IBDDs suppresses the real rate of interest making existing assets less expensive.
Bernanke: “Lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending,”
The CPI is a misnomer. It doesn’t include asset prices. Most bank money is used for existing assets.
The taco economy continues to disappoint for the average American, but not for the favored billionaires.
I tell ya, it’s a great economy, you can tell becuz people are spending more than ever…
Hassett (this morning): “People are spending more on gas, but they’re also spending more on everything else — not just groceries, but restaurants and so on. I think that’s a sign you see when people are optimistic about the future.”
BREAM: The Bureau of Labor Statistics says inflation is now outpacing wage growth. How do you answer that concern?
HASSETT: That’s a technical matter. Personal income includes things like transfers and food stamps that we have been reducing as part of our effort to make government leaner and meaner
Actually, the investor class does not give a shit about wages
“… one funeral at a time”
– Max Planck
“…if you had never been born”
-Clarence Odbody
“…we can never run out of dollars, they are printed digitally”
-Greenspan, Bernake, Powell and every other federal reserve stooge
Big consolidations lead to big changes. This housing market cycle peaked in late 2021 / early 2022. The consolidation has lasted more than 3 years. Foreclosures bottomed 2-3 years ago, and have not peaked. General economic conditions (inflation and employment) are getting worse. Conditions favor the start of the second bear phase of the housing market that takes the Case-Shiller housing index below 300.
A recent study says the Cape Coral-Fort Myers market has the highest housing vacancy rate in the U.S. among major metro areas, with nearly 40% of homes sitting empty. https://www.gulfcoastnewsnow.com/article/vacant-homes-cape-coral-neighborhoods/71112734
I’m not familiar with that metro, but I will bet most of those “vacant” houses are intentionally vacant as they are either vacation/second homes or simply investments where the owner doesn’t care about getting rental income since they’re swimming in money already. Just my 2 cents.
That phenomenon is pretty common in southern Vermont, where much of the housing is owned by wealthy out of staters and is used as weekend/vacation homes. To them, it’s also an investment, but they do not care about “cash flow”. Those homes are considered “vacant”.
I just read the linked story and sure enough my hunch was correct: “Instead, Darda said most vacant homes now can be put in 3 groups: hurricane-damaged homes, unfinished homes and also seasonal or vacation homes, which do count as vacant.”
“They’re paying their taxes. Some of them have mortgages, some of them don’t. When they do come down, they’re eating at our restaurants, they’re shopping at our stores,” Darda said of seasonal homes. “Just because they’re empty doesn’t mean they’re not enhancing our area.”
sold, all, my rental 2 family houses in 2022. 24 units in total. phoenix AZ. market prices down. cost to carry, taxes, utilities,maintenance……..way up since. sleeping like a baby…….. i’ll perhaps nibble again in future years if cap rates make sense. i like north of 15% over the past 40 years of riding the waves of r/e investing and restoration of beat up old houses 100 too 250 years old, in 4 regions of pax amerika. off topic a bit. but collapsing world wide empires usually end up being better for majority of folks in the long run. ussr, which i saw first hand. life in moscow…….in 2026 far superior for most than pre 1991. same goes for the uk, spanish, portuguese, french and even roman empires. the dark ages in europe were much more peaceful for most of the old subjects of ancient roman empire. my italian dual citizenship has had so many academic and espresso bar discussions on this topic. pax amerika is over. the rest of the ride is just eyewash. we are in retreat. a great thing. peace baby. freedom is the answer, what is the question.
Yes sir. Keep out of the real estate market. This will do wonders for you
There should be very little worries to find workers. Lots of people out of work, and looking for a way to make some cash. Sure it’s manual labor to a degree, but young need money just as much as old. In my area labor does not seem to be an issue at all. It’s the licensed trade workers are desperately needed, but not enough of them available. They charge a lot more as a result, and they can get away with it right now.
I totally agree, on new homes will just have to get smaller, to become affordable for the buyers looking for them. The Colonial desire is lost with affordability, and Ranches are what’s needed right now. You have a lot of boomers trading down, so inventory should be there. The larger houses, priced right, are selling in weeks if not days. Some same day they arrive on the market. My Daughter just sold her house same day, and bought a new one the next day. All designed as she moved across country, but it all fell together so nicely and quick for them!
The labor issue is slowly subsiding. As the desire for new homes, buildings, etc. is simply not there. There are more than enough homes available imo. I know so many people with second homes (a boomer thing), but that group is divesting themselves of 1 of them. Kids are placed across the Country and even World now. It’s hard to live near one another like families once did. The passing down of homes is also not what it used to be. Affordability being a big issue, but the need or desire just isn’t there for these big homes. Less kids, less need, less desire all makes sense. Boomers retiring and down sizing as well. Again leaving many bigger homes for sale in a down sized market request.
– We all know our government is going to continue to print our way out of any issues. > I don’t think they will or can continue to do so. They will be too busy spending money on War, Military, Energy, AI and more. The least of which will be to spend more money we don’t have, on emotional or made up issue’s. The NGO’s and USAID type expenses are no longer for the most part. Taking care of those that were not even supposed to be here, is another massive cost savings in healthcare, schools, etc. there is a lot of money that was being simply wasted (Ukraine quickly comes to mind), and some of that will become available again.
Things are a changing fast, as we awake every day, something new seems to be on the horizon. Tough to keep up with for sure, but necessary in this ever changing World of ours…
Young people can’t move out of their parents’ homes. Everyone under 30 is working overtime and getting less than a fraction of what Grandpa was handed for stocking shelves.
If you think that end well you truly are retarded. Baby boomers are going to be ridden out of town on a rail when the money for their welfare runs out. America’s non-performing military budget is gonna have to get a big cut soon, and AI was an investment that went nowhere, made energy expensive, and pissed voters off. Also wonderful of you to cheer killing off all of the rural hospitals supporting your only industrial areas!
My prediction: massive boomer bust out as social security and associated programs run out of cash when the economy runs into the dirt this year or next. Grandpa isn’t contributing a thing to the economy, but he’s got 2 houses and pulls triple out of SS than he put in. Money coming directly out of young people’s pockets.
Our entire economy revolves around productive workers servicing entitled old men, and that’s not working anymore. Those people who weren’t supposed to be here worked hard, Garry from Kentucky retired 10 years ago and voted the rest of his working nation into this crap.
My proposal: retirement = no more voting for you. Representation belongs to the people keeping the lights on. As such, anyone over 70 should be ineligible for any public office. No more fogeys who don’t have any skin in the game making every decision.
– Young people can’t move out of their parents’ homes. Why? Get two jobs at a fast food joint, always hiring and pay $18-$20 or $37,440 Yr – $41,600.00 Yr. Food for thought…
– a fraction of what Grandpa was handed for stocking shelves. > You worked your ass off back then, or got slapped upside the head, and got dirty work until you straightened up. Start with the emotional crap, and get yourself slapped across the face in a hurry…
– Baby boomers are going to be ridden out of town on a rail when the money for their welfare runs out. > Wrong folks? The Boomers help pay a whole lot on welfare for Others. Many on welfare are awaiting their grandpas home for themselves.
– America’s non-performing military budget is gonna have to get a big cut soon. > I don’t think it will pass, and if so, it will be challenged. Our Military performs very well, when called upon. Evil is the issue, and not American Soldiers.
– AI was an investment that went nowhere, made energy expensive, and pissed voters off. > Not sure we can say so just yet, and I am not a fan myself. Sucks energy up I agree, and we need all we can get now days. ChatGPT helped get 100’s on many test scores this past year, so it’s very smart, and so are the users in College. Hope they are not Doctors…
– My prediction: massive boomer bust out as social security and associated programs run out of cash. > A lot of other expenses will go first. People actually paid something into this program! Maybe some limits will be set. Net Worth has been tossed out. Maybe anyone over a Net Worth of, let’s say for discussion, $10M or more is not eligible? Maybe age goes up to 70?
– Grandpa isn’t contributing a thing to the economy, but he’s got 2 houses. > If he has Two Houses, then he personally contributed / helped Builders, Landscapers, Electric / Gas Companies, Restaurants, Taxes, The Town, The School Etc.
– My proposal: retirement = no more voting for you. > Elderly add more Wisdom than you obviously realize imho.
– anyone over 70 should be ineligible for any public office. No more fogeys who don’t have any skin in the game making every decision. > I could agree with some age, for certain roles, absolutely!
Two full time fast food jobs for all young Americans, brilliant! Go ahead, slap zoomers upside the head. They already shoot up a school weekly, think you scare them?
Here’s an idea. Tell us how old you are. Tell me what field you currently work in. I’m under 30 and I’m already more successful than most people before they retire, got my master’s before 25 too. So again, what exactly do you do, Stu?
And as for paying into the program: sure, at 1970s rates. Then Grandpa gets paid back with inflation adjustment. Pay in $2, get back $15. Makes perfect sense! Meanwhile healthy young people make less than ever real wages wise so Grandpa can enjoy the spoils of looting the system and pulling up the ladder. All elderly seem to do is vote reliably to keep that ladder pulled up while not continuing to work.
The difference is that I go to work every day, I went and got my education, got a high level job, and I get paid a fraction of what my job made in real money 25 years ago. Where’s my money going? Oh right! To people who do nothing and expect their inflation adjusted free ride while they vote to keep everyone else’s wages worthless and not adjusted. But sure, all the young people can simply cut your lawn for the 1998 equivalent of a dollar!
– Two full time fast food jobs for all young Americans, brilliant! > you said that, not me. I answered your question on how the person could find work to afford rent. Shouldn’t matter what the job is. I was a dishwasher at 13, under the table obviously, for cash. You do (work) what you must to get what you want.
– Go ahead, slap zoomers upside the head. > You said that, and not me. I was referring to your old timer situation, and how you would have been treated perhaps.
– They already shoot up a school weekly, think you scare them? > Weekly? Your source is weak then… I am not looking to scare anyone, and don’t even own a gun.
– I’m under 30 > I’m over 50. – I’m already more successful than most people before they retire > Depends on your definition of successful. I owned my first home at 21, second at 24. I didn’t consider myself successful, but rather smart. – got my master’s before 25 too. Skipped college, self taught, retired early. – So again, what exactly do you do, Stu? > Whatever I want to. As I said I am retired. I have money, time, resources, property, and desire, so at will I do so. Had been around the World many would say, by 40.
– And as for paying into the program: sure, at 1970s rates. Then Grandpa gets paid back with inflation adjustment. Pay in $2, get back $15. Makes perfect sense! > Have you figured out what you would get back, if you invested that money yourself in Amazon for example? How about Bitcoin? Don’t look at what it would do if not invested over that time frame, because the money was taken out of the kitty. Don’t blame the elder SS recipients for going by the book and doing what they were told to do, and promised a specific result if they did so. I agreed earlier to change it a bit where it makes sense, and if it makes sense.
– Where’s my money going? > To someone it was promised to. Speak with them, as they made the rules, and the people followed them…
– young people can simply cut your lawn for the 1998 equivalent of a dollar! > I still do that, and happily I might add. I do have a kid I hire locally, and pay him $25 PH. He keeps coming back to work, whenever I ask him to. I guess I must be doing something right…
If MAGA‘s mass deportations of illegal and legal workers go ahead, the housebuilding sector will be in a depression for years to come. Labor cost account for about 40 percent of housebuilding cost, and foreign workers account for about 40 percent of the house construction work force. And even taking into account the lower demand for housing because of deportations, housing prices and rents will have to rise substantially to clear the housing market, as suggested by the Peterson Institute scenario that the CPI will have to rise by about 8 percentage points by 2028 under a mass deportation scenario. If you are MAGA and can’t find an affordable home, thank Stephen Miller.
Labor accounts for 40% of hard costs, not overall costs. Hard costs are about 75% of overall costs in a residential development.
There has been no noticeable labor shortage on my projects due to deportations. It’s a non issue right now in my city. Over the longer term, sure because if a guy does get deported they’re not getting back.
The obvious variable that will be adjusted will be new homes will just get smaller. But it’s not a linear function, houses will probably have to get 12-20% smaller to offset that 8% increase you mention.
In my personal opinion, the labor issue is second order to interest rates, regulation and inflation (from governental policy). We all know our government is going to continue to print our way out of any issues and that is going to dwarf any other factor.
Well, ICE sure hasn’t been uniform in their prosecution. Which city?
– Labor cost account for about 40 percent of housebuilding cost, and foreign workers account for about 40 percent of the house construction work force.
> If correct, then it will self correct, by virtue of 40% Less House Construction work force needing to be required for the 40% less houses being built.
– housing prices and rents will have to rise substantially to clear the housing market > That is about as silly as it gets. Prices must Fall to alleviate the housing market, as it’s overbuilt and undersold. Less people need homes, and the ones that do, need far less of a home. So smaller homes, which need less labor and have a much lower cost is what’s required. People are getting foreclosed on, so those homes are also available. Price hikes will only leave your houses sitting empty, unsold, and aging with no occupants. Not happening, and beside, these builders need money and now! They will sell for what they can get, if they can get it imho.