According to Jeffrey Snider of Eurodollar University, May brought a crushing blow to the housing market. New data shows that home prices fell by the most in three years. New home sales didn’t just decline – they crashed by 13.7% in a single month. The worst part? The sharpest fall wasn’t in some small niche market. It hit the Southern U.S., one of the most active homebuilding regions, with a jaw-dropping 21% drop in new home sales. Snider says this isn’t just seasonal noise – this is the start of something much bigger.
It’s Not Just the South – It’s the Whole Country
Snider notes that this downturn isn’t isolated. Sales are falling across the country. The West saw a 5.4% decline, the Midwest dropped 7.1%, and again, the South led the pack with 21%. Prices are now starting to fall outright in key Southern markets like Florida. According to Snider, these declines are especially troubling because they’re showing up even in government reports, which tend to lag and smooth over bad news. When even the official numbers look this bad, it likely means things on the ground are worse.
Consumer Confidence Is in the Gutter
In a stunning detail, Snider highlights how the Conference Board just reported a sharp drop in consumer confidence for June. The index fell by 5.4 points to 93, and the expectations index tanked to 69 – well below the 80-point threshold that typically signals recession. The biggest driver of this loss of confidence? Job fears. Consumers are not just worried – they’re changing their behavior. They’re not just saying they’re scared. They’re acting on it, pulling back from big decisions like buying homes.
It’s About Jobs, Not Just Rates
Snider challenges the mainstream narrative that the housing bust is being caused by high mortgage rates. He says the real problem is income – or lack of it. People aren’t buying homes because they don’t feel secure in their jobs or confident about future earnings. Builders can offer all the interest rate buydowns they want, but if folks aren’t sure about paychecks, they’re not signing contracts. That, Snider argues, is the real “affordability crisis.”
The Builders Are Hitting the Brakes
With buyers disappearing, homebuilders are starting to slam the brakes. Snider points to a growing inventory problem – builders are sitting on a rising number of unsold homes. In fact, the supply of new homes for sale is now at the highest level since 2007, right before the last housing bust. Builders are offering subsidies and financing incentives, but even those aren’t working anymore. Instead, they’re starting to scale back construction plans to avoid getting stuck with more unsold homes.
The Bond Market Smells Trouble
While the Federal Reserve insists the economy is solid, the bond market disagrees. Snider explains that yields on two- and three-year Treasury notes are falling fast, back to levels last seen in April and September of 2023. That’s a classic sign of a “bull steepening” yield curve – a market signal that investors expect economic trouble and falling interest rates. Long-term yields are dropping, not because people are afraid of inflation or debt, but because they expect weaker growth and more Fed rate cuts.
Home Prices Have Stalled for Months
Looking at home price data from the Federal Housing Finance Agency (FHFA), Snider shows that prices have been flat since February. April actually saw a decline of 0.4%, the worst since July 2022. These are official numbers from the government, not private firms or alarmist analysts. If the FHFA is reporting falling prices, Snider argues, it confirms what the markets have been signaling: we are now in the early stages of a housing correction – or worse.
This Is Not 2008, But It’s Still Bad
One of the most important points Snider makes is that this housing downturn is different from the last one. In the 2000s, the housing bubble was driven by easy credit – subprime loans, zero-down mortgages, and “ninja” loans (no income, no job, no assets). Today’s problem isn’t over-borrowing. It’s under-earning. The market has shifted from speculative excess to basic economic weakness. That makes this bust harder to fix with monetary tools alone.
Prices Rose 54% Since 2020 – Incomes Didn’t
Here’s a stat Snider highlights that really hits home: the FHFA’s index shows home prices rose 54% between May 2020 and April 2025. But incomes? Not even close. For the average worker, wages didn’t even come near matching that pace. That disconnect has pushed millions of would-be buyers out of the market. It’s not interest rates pricing them out – it’s that they were never making enough to keep up with housing inflation in the first place.
Buyers Are Vanishing, But Sellers Are Coming Back
What makes this even more dangerous, according to Snider, is the changing market balance. For a while, the housing market had more demand than supply. Now, that’s shifting. Buyers are pulling back, but sellers, especially investors and builders, are putting more homes on the market. The result? A slow but steady increase in inventory, which could lead to downward price pressure in the months ahead.
Powell Keeps Claiming the Labor Market Is Strong
Federal Reserve Chair Jerome Powell still insists that the labor market is “solid,” but Snider calls that narrative shaky at best. He points out that when you adjust for labor force dropouts, the real unemployment rate could be closer to 5%, not 4.2%. That’s a big difference. Snider says the Fed’s public statements are growing more divided, with even some members of the FOMC now publicly expressing concern over job stability. If jobs are disappearing, then so is consumer confidence – and with it, the housing market.
This Isn’t Just a Housing Story – It’s an Economic Warning
What stands out most in Snider’s report is how clearly the housing market acts like a mirror for the entire economy. If people aren’t buying homes, it’s because something deeper is broken – mainly their trust in long-term financial stability. That’s not fixed with a rate cut or a tax credit. This is a jobs-and-income problem. It’s a confidence problem. And it’s one that, as Snider shows, is already showing up in both the data and the behavior of everyday Americans.
Why This Warning Shouldn’t Be Ignored
Snider’s analysis isn’t just a warning about housing – it’s a flashing red light for the entire U.S. economy. The media may spin tariffs or political drama, but the real story is right there in the numbers: people are afraid, their wallets are shrinking, and their behaviors are shifting. That’s not sentiment – it’s survival. Whether this turns into a full-blown bust or just a rough patch remains to be seen. But as Snider says, we’re seeing confirmation after confirmation that this isn’t just noise – it’s the real thing.
Raised in a small Arizona town, Kevin grew up surrounded by rugged desert landscapes and a family of hunters. His background in competitive shooting and firearms training has made him an authority on self-defense and gun safety. A certified firearms instructor, Kevin teaches others how to properly handle and maintain their weapons, whether for hunting, home defense, or survival situations. His writing focuses on responsible gun ownership, marksmanship, and the role of firearms in personal preparedness.