The domestic housing market has hit a strange turning point. If considering pure numbers, an observer could think that buyers are finally winning. Inventory is piling up, and sellers outnumber buyers by more than a third in many markets. Price cuts and concessions are no longer rare — they’re part of the script.
Yet, if you’re out shopping for a home now, it probably doesn’t feel like a buyer’s dream. Mortgage rates are still hovering above 6.5%, property taxes and insurance premiums are up, and affordability is scraping along historic lows. And all of this is playing out within the broader business cycle, which is, inconveniently, late in the game.
It is not about a housing slowdown – it is where it sits in the larger rhythm of booms, busts, and recoveries. To understand what’s happening, it is necessary to consider the link between the real estate cycle and the business cycle. One drives the other, and when one starts grinding, you can bet the other is going to feel it.
It’s A Buyer Market, Kinda
In June, there were about 1.922 million sellers and 1.413 million buyers, according to Redfin. That’s a 36% gap — well beyond the 10% margin that defines a buyer’s market. But here’s the catch.
Yes, buyers have more choices. Yes, price cuts are more common (21.5% of homes sold in June went below asking). But home prices are still 44% higher than in mid-2020, Newsweek calculated, and carrying …