🚨 WARNING: THIS IS HOW 2006 HAPPENS AGAIN!!
The US housing market is at one of the most UNAFFORDABLE points in history.
From 2000 to 2026, median home prices rose about 217% while income rose about 153%.
And rates are the killer.
30Y fixed is still ~6.0% (Freddie: 6.09%). That is HIGH enough to break demand.
At ~6%, the monthly payment is the real killer. Prices can go flat and buyers still tap out.
And a small move in rates matters way more than people think. +0.50% at these levels is a payment shock, not “noise.”
Rates don’t need to go to 8% to freeze housing. ~6% is already enough to cap buyers and kill volume.
Builders are saying the same thing.
They’ve said elevated mortgage rates are the biggest problem, and many expect it to stay a problem in 2026.
Builder confidence is still weak too.
THIS IS EXACTLY HOW 2006 STARTS.
Payment stress stays HIGH, and it doesn’t matter if prices go sideways, because the monthly bill is still heavy enough to push buyers out.
So demand doesn’t “collapse” in one headline.
It just quietly disappears.
Then the sequence always looks the same.
Transactions die first, because people can’t qualify or they don’t want to lock in a brutal payment.
Then confidence dies, because everyone sees listings sit longer and concessions start showing up.
And then the real economy feels it, because housing isn’t “just housing”, it’s moving, renovations, furniture, credit creation, fees, and jobs.
That’s why 2006 didn’t crash in one day.
It froze, then it cracked, then it broke, and most people only noticed when the damage was already everywhere.
I’ve studied macro for 10 years and I called almost every major market top, including the October
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