"Pending home sales plunged 7.3% in September, dramatically worse than economists expected, pushing contract signings to their lowest level since records began in 2001.
(. . .)
"Selling a home is expensive, disruptive, and often emotionally difficult. In other words, it’s a decision most households will postpone for as long as possible.
"Consider that more than 95% of existing mortgage borrowers have interest rates below current market levels, and roughly 65% have rates at least two percentage points lower. Millions of Americans are effectively locked into their homes because moving would mean taking on a substantially higher monthly payment. At the same time, prospective buyers are being priced out by a combination of elevated home prices and mortgage rates above 7%. The result is a market in which sellers have little incentive to sell, buyers have increasingly limited capacity to buy, and transaction volumes continue to deteriorate.
(. . .)
"There is also an important liquidity dimension to the collapse in refinancing activity. For years, homeowners benefited from falling interest rates that allowed them to refinance, reduce monthly payments, and in some cases extract equity to support consumption or pay down other debts. That channel has largely disappeared. With refinancing applications down nearly 60% from a year ago, one of the mechanisms through which housing previously supported household cash flow has become far less accessible.
"And of course, the consequences extend well beyond home sales. Housing is deeply interconnected with the broader economy. Fewer transactions mean less activity for mortgage lenders, real estate brokers, title companies, moving companies, furniture retailers, and home improvement businesses. Weakening construction activity affects contractors, building materials suppliers, and employment. As these pressures accumulate, the effects begin to spread through household spending, business investment, and ultimately economic growth."
(continued, including insightful notes on how this is expected to eventually affect equities)
● “Housing Is Collapsing, Wall Street Hasn’t Noticed; Buyers are disappearing, and liquidity is drying up. But Wall Street is too busy celebrating AI to notice,” QTR’s Fringe Finance (Substack), 10/21/26:
ARTICLE LINK (free paywall): https://quoththeraven.substack.com/p/housing-is-collapsing-wall-street
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