I am extremely concerned by what I am seeing in the housing market. When the Federal Reserve decided that it was going to start aggressively hiking interest rates, it was obvious that there would be a housing crash. I repeatedly warned my readers that prices would start declining and that home sales would fall precipitously. Needless to say, that is precisely what has happened. In fact, last week we learned that home sales have now dropped for nine months in a row…
Home sales declined for the ninth straight month in October, as higher interest rates and surging inflation kept buyers on the sidelines.
Sales of previously owned homes dropped 5.9% from September to October, according to the National Association of Realtors.
This is already the longest streak of declining sales ever recorded, and this new housing crash is just getting started.
But of course what we have already witnessed has been pretty breathtaking.
According to Zero Hedge, U.S. home sales in October 2022 were 28.4 percent lower than they were in October 2021…
This monthly decline pushed the year-over-year drop in existing home sales to -28.4% – its worst level since 2008!
Sadly, things are likely to get even worse in the months ahead.
The following are 3 major factors which will make 2023 a historically painful year for the housing market…
#1 The Federal Reserve
Fed officials keep assuring us that interest rates are going to go even higher.
This is literally suicidal behavior, but they are going to do it anyway even though they fully understand what this will do to the housing market.
In fact, an economist at the Dallas Fed just published research which shows that U.S. home prices could soon fall by as much as 20 percent…
U.S. home prices could tumble as much as 20% as the highest mortgage rates in two decades threaten to trigger a “severe” price correction, according to research from the Federal Reserve Bank of Dallas.
Fed policymakers need to strike a delicate balance as they try to deflate the housing bubble without bursting it, Dallas Fed economist Enrique Martínez-García wrote in the analysis published this week.
#2 The Employment Market
Officials at the Federal Reserve also know that hiking interest rates even higher will cause unemployment to go up.
We have already seen major layoff announcements at large corporations all over the nation, and now we can add Carvana to the list…
Carvana is laying off about 1,500 people, or 8% of its workforce, Friday following a free fall in the company’s stock this year, a weakening used vehicle market and concerns around the company’s long-term trajectory, according to an internal message first obtained by CNBC’s Scott Wapner.
The email from Carvana CEO Ernie Garcia, titled “Today is a hard day,” cites economic headwinds including higher financing costs and delayed car purchasing. He says the company “failed to accurately predict how this would all play out and the impact it would have on our business.”
If the Fed continues to raise rates, eventually millions of Americans could lose their jobs.
And because the vast majority of Americans are barely scraping by from month to month, all of a sudden we could have millions of homeowners that are unable to pay their mortgages.
Just like in 2008 and 2009, that would cause a catastrophic spike in foreclosures, and the ripple effects would be absolutely devastating for Wall Street.
#3 Underwater Mortgages
During the last housing crash, millions of homeowners found themselves deeply underwater on their mortgages as home prices fell rapidly.
If home prices end up plunging 20 percent or more in 2023, we will once again have vast numbers of Americans that owe far more on their homes than they are currently worth.
In 2008 and 2009, large numbers of people that found themselves in such a situation decided to simply walk away from their mortgages.
If the same thing were to happen again, it would cause an extraordinary amount of pain for lenders. So let us hope that such a scenario does not materialize.
Unfortunately, we continue to get more numbers that indicate that we are heading into a very serious economic downturn.
For example, we just learned that the Conference Board’s index of leading economic indicators has now fallen for eight months in a row…
The Conference Board’s Leading Economic Indicators index showed that conditions further deteriorated in October, with the gauge down 0.8% from the previous month. That follows a 0.5% decline in September.
“The U.S. LEI fell for an eighth consecutive month, suggesting the economy is possibly in a recession,” said Ataman Ozyildirim, senior director of economic research at The Conference Board.
Meanwhile, yet another survey has found that the vast majority of U.S. consumers are currently living paycheck to paycheck…
A new employee report said on Friday that as many as 60% of U.S. consumers are living paycheck to paycheck.
The report, a collaboration between data analysis PYMNTS and LendingClub, said 55% of nearly 3,500 people surveyed said they have limited spending capacity, and 49% are shifting their shopping preferences.
The report said that 66% of those living paycheck to paycheck have slashed spending.
Most Americans will not be dealing with the harsh economic environment that is ahead from a position of financial strength.
When things get really bad, millions of people will suddenly not be able to pay their bills.
In particular, I feel really bad for those that purchased homes at or near the peak of the market. So many of them are going to end up losing those homes.
We may have been able to avoid another housing crash if our leaders had pursued much different policies.
But that didn’t happen, and now we are going to experience an immense amount of chaos in 2023 and beyond.
The Federal Reserve created the largest housing bubble in American history by flooding the system with money and pushing interest rates all the way to the floor.
Now they are violently bursting that bubble, and the months ahead are going to be extraordinarily painful for the housing market.
***It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.***
About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com. In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible.
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Article cross-posted from The Economic Collapse Blog.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
