Home Sales Just Fell Below 2008 Levels… And It's Getting Worse

Jeff Snider · Atlas Financial

US housing is in a depression-level transactions slump that is worsening, with pending sales signalling lower completed sales.

NAR's pending home sales index fell 7.3% in September to 66, far below Bloomberg consensus, and was about 13% lower than a year earlier. It is at its worst since records began in 2001, below both the 2008 and pandemic-shutdown levels. Pending sales lead completed sales by several weeks, so Snider argues completed transactions will fall further. Existing home sales were running at 3.98 million annualized in August, one of only two readings below 4 million since fall 2024. Housing starts fell 5.2% to 1.22 million, single-family permits hit their lowest since early 2023, and the NAHB index fell to 39 with current sales at a 14-year low and prospective buyer traffic at pandemic-era lows. Snider rejects the NAR's explanation that mortgage rates are the main cause. He argues housing is a proxy for consumer confidence in employment and future income, so rates are an immediate excuse rather than the underlying driver. Rates fell at times without a meaningful sales recovery, and lower rates may not help if labour-market fear rises. Builders are cutting prices and offering incentives to roughly two-thirds of builders, yet traffic keeps falling. He calls the market gridlocked rather than temporarily delayed, with inventory at a decade high (4.9 months of supply) and transactions still falling.

“It immediately tells us this is bigger than one bad month or a routine response to rates. The housing market has been stuck at historically depressed transaction levels for years. September's pending sales collapse means that instead of finally escaping, it is sinking further into them.”at 2:47

Jeff Snider · Atlas Financial

The US labour market is weaker than reported, with revisions and depressed hiring and quits undermining the resilience narrative.

Snider argues the mainstream view of a resilient labour market conflicts with the data after revisions. Benchmark revisions covering 2024 and 2025 eliminated large amounts of previously reported payroll employment, so the initial data overstated strength. JOLTS job openings fell 256,000 in August to about 7.1 million, but hiring stayed near a depressed 5.2 million, essentially unchanged from July. The quits rate is low, which he reads as employed workers seeing few attractive alternatives, while the weak hiring rate means the unemployed struggle to find work. He links this to consumer surveys showing jobs anxiety at extreme levels. Because home buying requires confidence years into the future, this weakness in the labour market explains the collapse in housing demand. Consumers respond to signs of cost cuts, slowing orders and delayed hiring before layoffs show up in the unemployment rate.

“The labor market looks stronger in the initial data than it actually was. And that's crucial for housing because home buying requires that confidence extending years into the future.”at 9:39

Jeff Snider · Atlas Financial

US consumers got far less real goods than reported, and they are becoming more defensive in their spending.

Benchmark revisions erased about 5% from the estimated level of retail sales back to 2022, on top of major downward revisions the previous year. Snider argues that the spending authorities reported had largely not occurred, and that after adjusting for prices, consumers received much less real merchandise than nominal figures implied. Consumers felt this in their shopping carts, bank accounts and credit card statements, which is why they rejected the resilience narrative in surveys. Snider says consumers are becoming more defensive: they delay replacing vehicles, cut credit card use and avoid long-term commitments such as 30-year mortgages. He also cites weaker credit card borrowing and downward payroll revisions as part of the same pattern. He treats the consumer weakness as a parallel to the housing weakness, both reflecting the same underlying economic problem.

“After adjusting for price changes, real retail sales, consumers had received far less real merchandise than the nominal dollar figures had implied. They were paying more, paying a lot more, while getting less, getting a lot less.”at 13:29

Jeff Snider · Atlas Financial

The US economy is already in distress, and the resilient-economy narrative is wrong; housing may deepen the downturn.

Snider argues the US economy has spent years struggling to grow, and that official data's resilience narrative was based on revised-away figures. Revised retail sales and payrolls, weak credit card borrowing, and collapsing housing activity all point to the same weakness. He describes housing and the broader economy as two expressions of one problem, and says housing distress proves economic distress. He argues residential construction creates jobs and income across manufacturing, transport, appliances, financial services and local government revenue. Weak job confidence reduces home purchases, which causes builders to pull back, reducing employment and income and further weakening confidence. He concludes that housing 'can amplify the downturn that's already underway', so the economy is already showing major signs of distress.

“And what that says about this resilient economy, which is already showing major signs of distress.”at 19:36