The housing market in the United States has never been more paralyzed than it is right now. For years, the Federal Reserve kept interest rates at artificially low levels, and during that time most homeowners in this country were able to lock in fixed mortgage rates that were extremely low. Now that mortgage rates are soaring, many of those same homeowners feel trapped because selling would also mean getting a mortgage on a new home at a much higher rate. Meanwhile, most prospective homeowners feel like they are on the outside looking in because a combination of ridiculously high prices and painfully high mortgage rates has made homes more unaffordable than ever before.
There are only two ways that the housing market will get unfrozen.
Either mortgage rates have to come way down or home prices have to come way down.
Of course neither of those two things is likely to happen any time soon.
So we have a real mess on our hands.
The following are 5 signs that the housing market will be deeply frozen for the foreseeable future…
#1 Pending home sales are trending in the wrong direction very rapidly. According to the NAR, pending home sales were 11.3 percent lower in September 2026 than they were in September 2025…
Fast-rising mortgage rates in September took a harsh toll on the housing market, according to new monthly data released today.
Pending home sales, a measure of signed contracts on existing homes, dropped 7.3% from August and were down 11.3% year-over-year, according to the National Association of Realtors.
This count reflects buyers out shopping in September, when the average rate on the 30-year fixed mortgage rose sharply. It started the month around 6.8% and hit 7.6% by the end of the month, according to Mortgage News Daily.
This isn’t just a downturn.
This is a historic disaster.
At this point, pending home sales have fallen to the lowest level on record…
#2 Just like we witnessed just prior to the Great Recession, foreclosure filings are way up. In the month of August, they were a whopping 13 percent higher than last year…
ATTOM’s August report showed 40,277 properties with foreclosure filings, up 13 percent from a year earlier. Foreclosure starts rose 7 percent. Completed bank repossessions jumped 42 percent to 5,794 homes. South Carolina, Nevada, Florida, Texas, and Maryland posted the highest rates.
#3 We desperately need more homes to be built, but home construction numbers are just dismal. Last month, single family housing starts and building permits were both down a lot more than the experts were anticipating…
Home construction also took a hit in September. Both single-family housing starts and building permits fell much more sharply than analysts had predicted. Starts were down 4.56% to 859,000 annualized, according to the U.S. Census. That is the lowest level since September 2025. Building permits, which are a measure of future construction, fell 4% for the month.
#4 Homebuilders are not optimistic about the future at all. In fact, homebuilder confidence just dropped to the lowest level in 14 years…
The mood among America’s homebuilders is grim.
Homebuilder sentiment fell three points to 29 in October, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
October’s reading marks the lowest homebuilder sentiment the US has seen since June 2012, the NAHB said, when the housing market was still moving through the aftermath of the 2008 crisis. It shows just how much builders have soured on the housing landscape amid rising costs and a record-breaking slowdown in home sales.
#5 The housing market has already been in a depressed state for an extended period of time, and now economist Jim Paulsen is warning that his “Walmart Recession Signal” is peaking just like it did before the start of the Great Recession…
Economist Jim Paulsen calls his theory the “Walmart Recession Signal” (WRS). When Walmart’s stock goes up and shares of luxury companies in the S&P Global Luxury Index go down, it’s a sign that the country may be headed for a recession.
“As economic activity slows and recession risk builds, retailing purchasing patterns tend to gravitate toward discounters like Walmart and away from overall or luxury retailers,” Paulsen wrote in a Substack post Monday. “Consequently, a rise in the WRS could warn of a potential recession or at least a significant economic slowdown.”
And that warning is getting louder, he said. Just as it did before the Great Recession and two recessions in the 90s, the WRS is peaking.
What we are experiencing now reminds me so much of the middle of 2008.
Except this time around those on the bottom rungs of the economic food chain are in far worse shape.
As I discussed the other day, 44 percent of all Americans struggle to even pay for the basic necessities each month.
And millions upon millions of Americans are now living either on the streets or in their vehicles.
For example, in the Bronx there is a very long corridor known as the “Boulevard of Broken Dreams” where large numbers of homeless Americans have been living in “old RVs, trailers and trucks”…
Residents along an unsightly stretch of the Bronx are fed up with an eyesore corridor where the homeless have been bedding down in old RVs, trailers and trucks for years, The Post has learned.
The “Boulevard of Broken Dreams” along a section of Webster Avenue has been a headache for locals for at least two years — but the desperate folks calling the rundown vehicles home said they were driven to a bare-bones existence by the Big Apple’s sky-high rents.
These people aren’t living there because they want to live there.
These people are living there because they can’t afford a real home…
Those people told The Post they were driven to live in RVs and trucks by the city’s rents — which left them a choice between the streets, risky city shelters or the vehicles they now call home.
“We need housing,” said Rita Freeman, who said she’s lived in her RV since last November. “I mean, this is absurd. This is bizarre. There’s so many of us.
“I went into hotels, I maxed out my credit card for the first time since I had it since 1994,” she added. “Because I did not want to go to a shelter or the street. It’s very dangerous.”
This is happening all over the nation.
Every single day, even more Americans fall out of the middle class and into poverty.
We need affordable homes, but the housing market is not properly responding to market forces any longer because the Federal Reserve’s insane policies have thrown everything out of whack.
It has been said that if you play stupid games, you should expect to win stupid prizes.
Sadly, the Federal Reserve has been playing stupid games for a very long time.
Foolish actions have foreseeable and predictable consequences.
Now we are reaping what they have sown, and there will be no easy way to fix this mess.
There is a reason why I have been ranting about the Federal Reserve for nearly two decades.
The choices that they make have a very real impact on all of us.
Now we are steamrolling toward a major economic downturn, and they are actually thinking of raising rates again.
So much pain is ahead, and much of it could have been easily avoided.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.
