🦔Economist David Rosenberg is warning that home prices are starting to crack. His flag is that the annual pace of home sales has dropped to about 4 million, below where it was in early 2008. Sales have been frozen for three years while the national median price kept rising to a record $434,000. But that national number hides a split. Some Sun Belt metros like Austin and parts of Florida are already down year over year, even as other regions still climb. My Take I'd pump the brakes on the 2008 comparison. That crash ran on subprime loans and no-money-down mortgages, with a glut of supply that climbed well into the double digits in months of inventory. Today lending is tight, homeowners hold record equity, and foreclosures run five to seven times lower than back then. Supply is only about 4.6 months. This is a frozen market, not a house of cards. Nobody can afford to buy at these rates and prices, and sellers with cheap pandemic mortgages won't give them up. The result is a slow grind rather than a sudden collapse, and in the overbuilt Sun Belt it's already showing up as falling prices. The bigger worry is what falling home prices do to spending. Most people feel richer when their house is worth more, and they spend that way. When the number stops climbing, they pull back, and consumer spending is about 70% of the economy. Rosenberg himself says the main reason the US hasn't slipped into recession is the AI boom, all that data center building and hardware spending. So picture the two legs holding this economy up, a housing market losing steam and an AI buildout running on debt. Neither looks as sturdy as the record prices and the record stock market make them seem. Hedgie🤗