Peter Schiff’s Chilling Warning: ‘Get Ready for the Mother of All Housing Crashes’

U.S. existing-home sales just hit a level not seen since 2010. But Peter Schiff believes the most dangerous part may still be ahead. Unlike 2010, when home prices had already collapsed, he argues today’s market faces a potential crash with prices still near record highs.

Existing-Home Sales Fall to a 16-Year Low

In a post on X on Thursday, Schiff pointed to a 5.5% month-over-month plunge in existing-home sales in October and an 8.8% decline from a year earlier. Sales dropped to a seasonally adjusted annual rate of 3.75 million, the lowest since August 2010, according to the National Association of Realtors.

"2010 was after real estate prices crashed. Today’s low sales come before the crash," Schiff wrote. He warned: "Get ready for the mother of all housing crashes, especially if the Fed keeps hiking."

The median existing-home price rose 0.4% year over year to $416,700, marking the 40th consecutive month of annual price increases. Inventory climbed 1.3% from September to 1.59 million homes, equivalent to a 5.1-month supply.

That points to a market where transactions are weakening faster than prices. Higher mortgage costs have sidelined buyers, while homeowners have largely avoided steep discounts. The 30-year fixed mortgage rate averaged 7.33% in October, up from 6.25% a year earlier, NAR data showed.

Which Housing Stocks and ETFs Should Investors Watch?

Schiff’s warning puts housing-sensitive investments in focus, although the impact will differ across the industry. The iShares U.S. Home Construction ETF (BATS:ITB) and the State Street SPDR S&P Homebuilders ETF (NYSE:XHB) offer broad exposure to homebuilders and related companies.

Among individual stocks, D.R. Horton, Inc. (NYSE:DHI) and Lennar Corp (NYSE:LEN) are worth watching because prolonged affordability pressures can weigh on new-home demand. Builders can sometimes offset weak resale activity with mortgage-rate buydowns or other incentives, however, so existing-home sales are not a direct read-through to their results.

Rocket Companies, Inc. (NYSE:RKT) is another housing-sensitive name. Lower homebuying activity can mean fewer purchase mortgages, although refinancing demand may respond differently if rates fall.

The Fed Is the Risk Schiff Is Watching

Schiff’s forecast is conditional: He sees greater danger if the Federal Reserve keeps raising rates. Higher borrowing costs can further squeeze affordability and deepen the standoff between buyers and sellers.

Still, October’s data do not confirm a crash is underway. Distressed sales accounted for just 2% of transactions, while prices continued to rise.

Investors should watch whether inventory keeps building, price growth turns negative and mortgage rates remain elevated. Those signals will help determine whether the market is frozen—or beginning the correction Schiff predicts.

Photo Courtesy: Peter Schiff