For the first time since May 20, 2026, oil closed above $100 yesterday at $102.48.
Bond yields continue to frustrate Bessent’s “Treasury Twist.” The 10-year yield is a fraction of a point below 5%… reaching a 19-year high. On April 20, 2007, just before the Global Financial Crisis, the ten-year yield closed at 5.03.
As you might expect, mortgage rates are following suit.
Every time the market gets another reminder that inflation is not dead, the housing market gets another reminder that “affordability” is still broken; a major source of contention among voters considering their choices before the November 3 election.
Housing is one trade that still is not playing along with the debasement trade. With the dollar under pressure and hard assets moving higher, you might expect U.S. housing to join the party.
After all, a house is a real asset. Land cannot be printed. Lumber, copper, labor, insurance and financing costs all rise when the purchasing power of the dollar falls.
But housing has one problem that most hard assets do not: The buyer usually needs a mortgage. The housing market has had a surplus far exceeding the 2008 meltdown since early 2025:
When mortgage rates moved from the 3% many homeowners were able to reset from 2020-22, to the 6%–7% range today, while historically average, the norm appears irrational.
The biggest problem for Republicans entering the midterms? The debasement trades hit those with fewer assets the hardest.
Food is more expensive. Gasoline is more expensive. Insurance is more expensive. Borrowing is more expensive. We saw a social media post this morning suggesting that some gas stations in California will have to use makeshift signs because most signs only accommodate three digits… $9.99 a gallon is the last stop before prices require four.
As Lau Vegys reminded us yesterday, the single largest purchase most families ever make has become out of reach for millions of would-be buyers.
The average 30-year mortgage rate rose to 6.76% this week, the highest level in more than 14 months, while another daily measure from Mortgage News Daily crossed back above 7%.
The result is a housing market that looks frozen from both sides.
Buyers are on strike because the monthly payment no longer works. Sellers are sitting still because many are locked into 3% mortgages and do not want to sell into a world where their next loan will cost twice as much.
As a result, existing home sales fell to a 14-month low in August, while inventory rose to 1.62 million units, the highest level since November 2019.
For the market to clear, either mortgage rates have to fall, home prices have to fall, or incomes have to rise enough to bridge the gap.
Real estate still plays an important role in your long-term investment plan, and some of the better values may be overseas, where our friends at Real Estate Trend Alert continue to find markets that are not trapped in the same U.S. mortgage-rate squeeze.
But in the domestic market, the signal is clear enough. Housing is not rejecting the debasement trade because real assets have stopped mattering. Housing is rejecting it because the financing cost is too high.
For most, the affordability crisis is not abstract. It is food, fuel, insurance, rent, mortgage payments and the feeling that the ladder keeps getting pulled up one rung at a time.
Until rates move materially lower, or prices finally adjust enough to meet buyers where they are, a large part of the U.S. housing market remains locked in place.
No guarantees it will hold, but a squeeze buys Bessent and the Bank of Japan time and forces a lot of leverage out of the trade. In today’s Grey Swan Pro, Andrew shows you exactly where to place your chips if you agree with the contrarian’s bid.
~ Addison
P.S. Yesterday, we brought Zoltan Istvan back on Grey Swan Live! for another riveting examination of the “most dangerous technology humans have ever created.”
“We should have titled this one ‘How AI Is Going To Kill Us All In the Next Decade’,” Andrew joked immediately after we finished recording:
Zoltan has spent the past few months in the Grey Swan Monthly Bulletin outlining the conferences he’s speaking at and what he’s seeing in the world of AI and robotics.
The good news? This technology is transformative, and the world as we know it is shifting rapidly. The conversation wasn’t nearly as dour as Andrew’s remark. The “intelligence revolution” is driving meaningful changes in how we invest and work, helping us stay ahead of the curve.
If you didn’t join us, it’s worth taking a listen to the replay. We fielded a number of member questions. And Andrew suggested a solid investment strategy as killer AI apps dominate the news cycle leading up to midterms.
Ed note: Next Wednesday, Zoltan will be moderating several panels during a symposium being held on Capitol Hill in Washington D.C. for members of Congress concerned about the rapid development of AI technology and changes to the body politic.
