Episode summary
Home Sales Just Fell Below 2008 Levels... And It's Getting Worse
Eurodollar University
· · Hosts: George Gam
Summary
Pending home sales in the United States just hit the lowest level ever recorded, and the host argues that the collapse is bigger than a mortgage-rate story. He says the latest 7.3% monthly drop in the National Association of Realtors’ pending sales index points to even weaker completed sales ahead, after years of historically depressed housing activity. Housing starts, permits, and existing-home sales are also described as weak, while homebuilder confidence and buyer traffic have sunk to severe lows.
George Gam argues that the real problem is not just financing costs but consumer confidence tied to employment and future income. He says households will not commit to a 30-year mortgage if they fear layoffs, slower hiring, reduced hours, or weaker earnings ahead. In his view, the housing data lines up with revised labor-market and retail-sales figures that suggest the economy has been weaker than the initial data implied.
Builders are responding with price cuts and incentives, but that has not revived traffic or transactions. The host says the market is frozen because buyers, sellers, and builders all lack confidence, and that lower rates alone will not fix a labor-market-driven demand problem. He concludes that pending sales are a warning signal for the broader economy, not just real estate.
Key takeaways
- George Gam says pending home sales fell 7.3% in September to 66, the lowest reading since records began in 2001.
- He argues mortgage rates are only the trigger, while labor-market insecurity is the deeper reason buyers are absent.
- The National Association of Homebuilders index fell to 29, with current sales at a 14-year low and buyer traffic near pandemic levels.
- Existing home supply rose to 1.62 million, yet sales still fell, which he says shows the market is frozen rather than simply short of listings.
- He says pending sales matter because they lead completed transactions, so the record low points to further deterioration ahead.
Notable quotes
“Pending home sales in the United States just fell to the lowest level ever recorded”
“the housing market is not merely a proxy for interest rates. It's a proxy for consumer confidence, especially confidence in employment and future income”
“A household that expects stable employment may tolerate a higher mortgage rate, especially if it believes refinancing will eventually be available”
“the housing market, labor market anxiety converted into missing transactions and homebuilders, they absolutely see it”
“Pending home sales just fell below every level recorded during the 2008 crisis and the 2020 2021 lockdowns”
How the episode opens
Pending home sales in the United States just fell to the lowest level ever recorded. Not the lowest since mortgage rates went above 7%. Not the lowest since the pandemic.
The lowest since the National Association of Realtors began tracking the data in 2001. Worst in 2020, worst than 2008. And pending sales are not the only housing indicator flashing red.
Housing starts fell to one of their weakest rates since the lockdowns. Single family construction dropped to a one-year low. Permits for future single family homes fell to the lowest levels since early 2023.
Home builder confidence just plunged to a 14-year low. Buyer traffic is back near pandemic era levels. More builders are cutting prices and roughly twothirds are offering incentives just to get customers through the door.
Meanwhile, existing home sales are already running at depression-like levels. Pending sales, they lead completed transactions. So that depression is about to get even worse.
Now, naturally, the National Association of Realtors or N says this is mostly about mortgage rates. It clearly isn't. Rates matter, obviously, but the housing market is not merely a proxy for interest rates.
It's a proxy for consumer confidence, especially confidence in employment and future income. A mortgage is not only a bet on where rates will be next month. It's a bet that you'll still have the income or even a job next year.
Now, housing is confirming the same story. Americans are not waiting for a better mortgage rate. They're afraid to make the largest financial commitment of their lives because they don't trust the economy that's supposed to support it.
And the data that we keep getting, especially more recently, it's not hard to see why. The N's pending home sales index collapsed 7.3% in September to a reading of 66.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- pending home sales
- housing market downturn
- mortgage rates
- housing indicators
- portfolio risk signals
Companies and tickers mentioned
- National Association of Realtors
- Eurodollar University
Watch the episode
Watch “Home Sales Just Fell Below 2008 Levels... And It's Getting Worse” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Eurodollar University, this episode and its artwork belong to Jeff Snider. Octagon is not affiliated with the show; this page is an independent summary.
