Small Moves & Nonsense in Nashville

Battling narratives has become my full-time job so when you have two entities from the opposing camp go open kimono on housing it can be a bit disconcerting - especially to a contrarian. What exactly does it mean that CNBS ran a story last week talking about home price reductions and that Zillow published its prognostication that home prices would fall this year? Being in the same camp as these two did not immediately give me the warm and fuzzies.

But, Dear Reader, I hope it is precisely because I unceasingly ask questions of myself and my thesis that you subscribe to my Substack. What I’ve noticed about us narrative-bashers is that we bash and bash, but when mainstream media delivers a headline we like, we often jump with glee and dance a victory dance. It’s no wonder because being a data-gatherer and researcher can be a very lonely gig as you daily fight the trolls, Wonder-Woman style. My favorite troll likes to say things like “what could you possibly know that the experts like Zelman, Zonda, McBride, etc. are missing?” He recently asked that question to Grok about a comment I made stating multifamily is significantly overbuilt. My comment was in response to the utter nonsense that is being spewed out there that supply will be restricted in 2026 because of how few permits have been filed recently. I hear it on FinTwit, on YouTube as well as at a presentation on the economy from a Mortgage Bankers Association card-carrying member at the private note conference I just attended. All you have to do is take a little peak into these cities using Census bureau data, read the Harvard household demand study, or drive around to know that narrative is just not based in fact. Grok ultimately agreed to my point, but that gave me little comfort as well with how much it missed when answering the troll initially. The relief you feel when one of the big pubs finally wakes up out in social media land can be tantalizing. However, I believe it’s important that even when we like the headline, we continue to think about why this story now and what it could mean to the path ahead.

Does this mean I’m changing my mind that home prices will go lower this year? No, the small moves I’m seeing under the hood are getting bigger and bigger as I will discuss below, but I do have to wonder what these entities have to gain with this message now. Honestly, they were not the first to start changing their tune. Remember when I discussed how Realtor started sending “Price Drop” emails at rapid-fire pace earlier this year? And then, the WSJ published some very interesting headlines about home prices, one of which is below.

Given Realtor.com and the WSJ share a parent, I tend to read a little more between the lines when a story pops up in the WSJ. They have more access to the micro and MLS data from what I can see although I would be very curious to know exactly what housing data gets loaded into the Bloomberg Terminal.

What I can tell is that the industry in general is trying desperately to save the spring selling season. I think ultimately the industry knows the only way to get buyers to even crack open that website where they can show you those ads and collect and sell your data is to lure hopeful buyers there with price cuts. I would not doubt as well that in some boardroom it has been discussed that if they can just get buyers to come give a look-see that home prices will start to stabilize. I’ve been in the room during those types of conversations, and that is just pure hopium.

Sorry folks. With student loans REALLY, REALLY coming due and credit scores getting obliterated the line at Rocket Mortgage is going to get smaller and smaller. Speaking of - Happy Student Loan Collection Commencement Day aka Cinco De Mayo. It’s not just mortgage though - all-cash sales are also disappearing as foreign buyers and investors slink away.

Have you heard Rocket’s recent commercials about making your “unaffordable” dream a reality? All of these nonbanks went whole hog into FHA. Now that your Mom-and-Pop investors and first-time homebuyers are both royally scr*wed, there just is not going to be enough business for these nonbanks. The Richie Riches typically go to the banks for their jumbo loans. I will keep mentioning as well that mortgage refinance rejection rate at 41.8% for February until we get March’s reading.

The double-whammy of Buy Now, Pay Later (BNPL) being reported in April and the commencement of collection on student loans in May is going to make for a very, very interesting second quarter report from the New York Fed into the state of household debt.

One in four Americans is using layaway for groceries…but of course it is not layaway. I remember very well taking my $5 to the local clothing store each week for an outfit I wanted to wear on my 6th grade trip to New York City. I made that $5 by washing dishes at night after school. These days though, they give you the stuff before you have paid it off. Bessssssssssstttttttttt economy EVERRRRRRRR!

Once the true health of the consumer is on full display, we are going to see shock from anyone who has been tuning into Bubblevision. Think MSM won’t do a full-on pivot? Just remind yourself of the pundit performance following the fateful Biden-Trump debate. Perhaps this is also why we are starting to see capitulation in the media and from the industry - they want to salvage the tiny amount of credibility they do have. In my talks with industry insiders recently there has been an acknowledgment that they just weren’t aware of these issues even when I’ve been trying to warn them for the past 18 months.

Speaking of that private note conference, I am recently returned from Nashville and have lots to share. Who here remembers my very first trip to Nashville in February 2023, two short years ago?

Nashville was the very first city I ever visited. I have been back two times since and each time brings intensity to the pit in my stomach thinking of what’s ahead. What new madness did I see there? Nashville is the next stop on our spring selling city tour. Additionally, I will share some tidbits from my time at the private note conference as well as some very, very interesting city-specific data from March results. Curious what Pulte meant by looking at ways to “recall” loans. That was discussed in detail at the conference. To contextualize those March city results, I look at this time last year to show how trends are indeed changing. For instance, in March of 2025 we saw 19 of my 85 cities with both YOY and MOM price drops...in the high season. That number in 2024 was 4. What can be gleaned from cities where sales are increasing while prices are decreasing? Where are those cities and who’s in trouble?

It’s hammer time…