WARNING: SOMETHING VERY BAD IS ABOUT TO HAPPEN

The US housing market has just reached its most expensive point EVER. WORSE THAN 2008. And if you think the housing market doesn’t affect the global market, YOU ARE COMPLETELY WRONG. This isn’t just a real estate story.

• It’s a story about CREDIT.
• It’s a story about CONSUMERS.
• It’s a story about CASH FLOW. That’s the part most people overlook. The average home price in the US now is around $415,000, compared to about $270,000 five years ago. That’s a 54% INCREASE. Wages during the same period only increased by about 29%, and that gap is the REAL issue. Mortgage rates are the SECOND blow. Interest rates have risen from 2.7% to around 6.3% over five years, meaning monthly payments have been SIGNIFICANTLY REDUCED even before home prices stabilize again. Now, connect the dots. To qualify for a mortgage on the current average home price, you need about $127,000 in household income. The average household income is around $80,000. Do the math. Nearly 75% of homes listed for sale are UNAFFORDABLE for an average American family. Three-quarters. That explains a lot. Because the housing market doesn’t crash when home prices suddenly fall; it crashes when buyers quietly disappear and transaction volume begins to decline first. And THAT is exactly what the data is showing right now. Pending home sales have just dropped to the LOWEST level ever recorded. This means that demand for housing is weaker now than in 2008.
• It’s not a “slow market.” - It’s a COMPLETELY BROKEN market. Because pending home sales are signed contracts, they indicate demand BEFORE the final transaction is completed and before the downturn is fully realized. And the reason is simple. Payments are too high. Mortgage rates around ~6% are enough to make monthly payments UNBEARABLY high and kill demand after years of rising home prices. That’s why people keep missing the opportunity. They look at home prices and think everything is fine, but the housing market usually collapses due to affordability issues, payment pressures, and transaction volume dying first. And then the real economy will feel it.
• Mortgages
• Bank lending
• Construction
• Renovations
• Interior design
• Appliances
• Local services Housing isn’t just “homes.” It’s one of the BIGGEST drivers in the system. When pending transactions hit record lows, banks will have less lending growth, credit creation slows, liquidity dries up, and risky assets stop functioning normally. THIS IS A WARNING. These sluggish markets are very dangerous because they initially seem calm but then collapse once losses spread everywhere.