Robert Shiller's Case-Shiller National Home Price Index just posted 0.8% year-over-year growth in April 2026 — down from 2.8% just one year earlier. The 20-City Composite sits at 1.1%. Inflation-adjusted, real home prices are in decline. Shiller has warned repeatedly that elevated valuations combined with affordability collapse create conditions for a prolonged correction — not a crash, but a slow bleed that destroys consumer confidence and generational wealth quietly.

Here's what the data is actually telling us right now:

Home Depot — America's largest home improvement retailer — just reported adjusted EPS dropped from $3.56 to $3.43 even as revenue grew. CEO Ted Decker said on the record that consumers have been under "housing affordability pressure" for over a year straight with no sign of relief. CFO Richard McPhail stated publicly they have "not yet seen a catalyst for inflection." Translation: nothing is fixing this in the near term.

Meanwhile Costco reported record home furnishings and appliance sales — double digit growth. That's not economic strength. That's Americans who have given up on moving and are upgrading the homes they're already trapped in.

Here's the mechanism nobody is explaining correctly:

70% of U.S. homeowners with a mortgage hold a rate below 5%. The 30-year fixed today is 6.43%. On a $400,000 mortgage, that rate difference costs $483 more per month — $173,932 in extra interest over 30 years — just to move across town into essentially the same house. So nobody moves.

The result: 4.06 million existing home sales in 2025 — the lowest since 1995. Adjusted for population growth, home turnover is at its lowest in more than four decades. You would have to go back to 1981 — when mortgage rates briefly hit 18% — to find a more frozen market. Today's 6.43% is producing the same transactional paralysis as 18% did 40 years ago.

And now Phase 2 has arrived.

A record 34.2% of American home sellers cut their asking prices in February 2026 — the highest since Redfin began tracking in 2012. Average cut: $40,915 or 7.3% off list. By April it was 35.4%.

Sun Belt price cuts right now:
San Antonio — 57.9% of sellers cutting
Austin — 55.2%
Dallas — 47.3%
Tampa — 45.9%

There are now 470,000 more home sellers than buyers in the United States.

The canary in the coal mine: FHA loans now represent a record 55% of all seriously past due mortgages. Foreclosure pre-sale inventory is up 34.21% year over year. Active foreclosures hit 280,000 — the highest in six years. All of this while unemployment is still historically low.

The 37% of income the typical American buyer spends on housing today is well above the 30% threshold that has historically defined affordability stress. When homeowners feel poorer, they spend less — that contraction ripples the economy.

Pay attention to the data. Not the headlines.