The current troubles in the American housing market are an important sign that the broader U.S. economy is slowing. The inevitable results of wrongheaded economic policies are finally overpowering the massive stimulus that was perpetrated in response to the COVID-19 lockdowns.
Particularly egregious and disastrous were the reckless spending increases by President Joe Biden and congressional Democrats—with no Republican votes at all—in 2021 and 2022 after the economy had already recovered.
To stop the inflation caused by that overspending, the Federal Reserve (Fed) tightened the money supply significantly in 2022 and early 2023. That increased mortgage interest rates from around 3 percent a couple of years ago to nearly 7 percent now. That, in turn, has driven the home sales index to its lowest point this century—even lower than during the late-2000s housing crisis and the 2020…
