Why does today’s housing market feel so strange?
The answer is in the data. October existing home sales came in at 4.1 million annualized units, almost identical to September and eerily similar to October 2008, the middle of the Housing Bust and the month after Lehman collapsed. For context, today’s sales pace is roughly 20% lower than the worst month of the 2001 dotcom recession and far below the 2021 peak of 6.6 million. In short, activity is flat. Buyers are waiting, sellers are waiting, and today’s housing market recovery is waiting too.
For historic context on home sales trends, see the National Association of Realtors
How Monetary Policy Shapes Today’s Housing Market
Here is where it gets interesting. In both the Housing Bust and Covid cycles, the Federal Reserve stepped in and bought massive amounts of Treasuries and mortgage-backed securities. If the next recession arrives soon, top economists expect the Fed to again buy Treasuries but potentially move away from mortgage bonds. Instead, future support could come from purchasing AI hyperscaler bonds issued by companies like Meta, Microsoft, and Oracle due to their outsized influence on GDP growth.
This shift would mark a major evolution in how today’s housing market receives liquidity, with housing indirectly supported through AI infrastructure investment.
Employment Trends and Their Impact on Today’s Housing Market
Employment tells its own story. September added a net 119,000 jobs, but prior months were revised down. Most gains came from leisure, hospitality, and healthcare. Job growth has slowed from above 4% several years ago to just 0.8% today. This is not a collapse but a steady softening that affects real estate demand, buyer confidence, and overall market momentum.
Employment data from the Bureau of Labor Statistics shows the entire story.
Consumer Sentiment and the Future of Today’s Housing Market
Consumer psychology has also shifted dramatically. A decade ago, 85% of Americans identified as middle class. Today, that number is 54%, while more than 40% now identify as lower or working class. This matters because real estate markets thrive on households that believe in upward mobility. When fewer people feel financially secure, everything from homebuying decisions to long-term neighborhood stability is affected.
What This Means for Nashville and Local Investors
Nashville remains one of the most resilient markets in the country, but national trends still influence affordability, sentiment, and the pace of local recovery. Smart investors are watching the macro data as closely as the comps because today’s housing market is shaped by forces far beyond any single city.
