Home sales sink to an all-time low

There are really two American economies. One is the imaginary version promoted by Trump and his MAGA allies. The other is the one most Americans actually experience, where inflation continues to erode real disposable income.

Trump claimed in 2024 that the Biden and Democratic economy was terrible, and promised that if voters chose him, things would quickly improve. He made specific pledges, including gasoline under $2 a gallon and 2% mortgage rates.

That did not happen. Gasoline is now $4.28 a gallon, and mortgage rates are averaging 7.4%.

Existing home sales have plunged. The National Association of Realtors Pending Home Sales Index has dropped to 66.0, its lowest reading since the series began in 2001. It is now worse than during the 2008-09 housing crash. Home sales were already historically weak after the COVID-era buying frenzy, but under Trump, “historically weak” has become “extremely weak” and now “record low.”

That should not be surprising. Trump has promised a great deal and delivered very little. In 2016, he said, “We’re gonna win so much, you may even get tired of winning.” Years later, after multiple years of Trump in power, Americans are still waiting to get tired of winning.

Buying a home is often the biggest financial decision a person makes. The math is straightforward: can the buyer afford the monthly payments, and does the borrowing cost make sense?

That affordability question depends on income now and expected income later, but it also hinges on mortgage rates. Even small rate changes matter over time. A 30-year fixed mortgage currently carries a 7.4% rate. Here is the comparison:

The median U.S. home price is $423,000. If a buyer finances $370,000, the monthly principal-and-interest payment at 4.0% would be $1,766. Over 30 years, total payments would reach $635,917, including $265,917 in interest.

At 7.4%, the monthly payment rises to $2,562. Over 30 years, total payments climb to $922,250, with $552,250 going to interest. That means an extra $796 a month and $286,333 more overall. That is a substantial difference.