Spiking Interest Rates Freeze Housing, In Five Charts

Inflation isn’t moderating. Instead, it’s stuck at levels far above the Fed’s 2% target:

Sticky inflation is causing long-term US interest rates to spike:

Spiking 10-year yields have pushed mortgage interest rates above 7%:

Home sales, already anemic, fell again in August:

But despite all of the above, home prices haven’t declined:

Panic Selling

Three groups of homeowners are watching current trends with growing anxiety:

• Boomers who, at long last, are ready to sell their McMansions.

• Airbnb entrepreneurs whose properties aren’t paying for their upkeep.

• Private equity landlords who face growing (and well-deserved) public outrage and unfavorable regulatory changes.

Collectively, these three own millions of houses and condos. Many of them have been waiting for a more favorable market to cash out, and, thanks to the past month’s data, are suddenly concluding that things are about to get much worse.

The result will be a tsunami of inventory hitting the market just as would-be buyers are paralyzed by rising mortgage rates. 2027, in short, is looking like a real estate bust for the record books.