The housing market is one of the single most important parts of the U.S. economy for a variety of reasons.

First, obviously, is the fact that you need a place to live, whether that is an apartment, a trailer, or a house. Having personal living space, aside from the mental health benefits of having personal psychological space from your neighbors, is crucial to stability for employment and for safety (it's easy to rob or assault people living under bridges) and personal hygiene (which, of course, is important for employability).

Beyond that, though, housing is crucial because, for most Americans, their home is their single biggest investment asset. Take away their home, and they don't typically own very much that they could sell to retire on.

So, home values and market demand can strongly impact a person's long-term financial stability.

And when you start paying attention to the overall economic impact of housing, you look at how many industries provide material for building housing and how much of the labor market is employed in construction. It's a huge part of the economy.

How much? The National Association of Realtors (NAR) estimated that the real estate market contributed $4.9 trillion, or 18%, to U.S. GDP as of 2023.

Yes, nearly one out of every five dollars spent in the U.S. economy goes towards home sales.

That doesn't even begin to touch on the impact on the economy of home maintenance, furnishing, utilities, and financing the home (or apartment complex).

It's massive.

But home sales have been struggling.

As I've mentioned before, unlike in 2003, when people overwhelmingly said that it was a good time to buy a house, people now overwhelmingly say that it's not a good time to buy a house.

Specifically, 79% of Americans say that this isn't a good time to buy a home.

That opinion has had the effect that you'd expect: Demand for housing is down which is causing decreasing housing inventory as builders try to adjust to the lowered demand.