We are excited to announce that Jonathan Miller, who has long authored the most authoritative report on the residential real estate market, is partnering with The Real Deal. Below, you’ll find his Housing Notes column, which will now run on our site several times a week. In addition, Miller’s quarterly report for New York City, which he published through Douglas Elliman for more than three decades, will now be “The Real Deal report, prepared by Jonathan Miller.” Miller’s data venture, Streetmatrix, which provides hyperlocal data, will provide statistics to TRD Data subscribers.
— TRD editors
S&P 500 is at record highs
My good friend Barry Ritholtz, prolific blogger, Bloomberg host of the Masters in Business podcast/radio show and founder/CIO of Ritholtz Wealth Management, shared a recent post with me that got me thinking. He starts with an epic summary:
The stock market is hitting all-time highs, even as consumer sentiment hits all-time lows.
Is this a paradox?
Hardly.
The confusion stems from people who imagine market prices move off their personal economic experiences (as well as broader consumer sentiment). This is a false belief, easily disproven with a few data points and charts.
“This market makes no sense!”
Consumer sentiment at record lows
The University of Michigan’s Consumer Sentiment Index (reading this as an MSU Spartan alum, the index’s name always hurts) hit its lowest level in the survey’s history in April 2026, even weaker than the troughs during the 2022 inflation spike and the Covid shock.
…consumer sentiment ended April with a final reading of 49.8, above the 48.5 reading economists expected but marking the lowest level on record — below readings taken during the financial crisis, the COVID-19 pandemic, and when inflation spiked following Russia’s invasion of Ukraine.
While we’re here, it’s good to understand the difference between consumer sentiment and consumer confidence:
- Consumer sentiment (University of Michigan) is more about how people feel in their gut about their own finances and near‑term outlook. How do I feel about my money right now, and how do I expect it to look over the next year? “Sentiment” is probably more of a leading indicator than confidence with its focus on personal finances.
- Consumer confidence (Conference Board) is more about how people think the economy and job market are doing now. How do I think the job market and broader economy are doing? “Confidence” helps spot changes in the labor market before the data shows it.
First of all, the stock market is not the economy; it is a subset of the economy. However, working in NYC, the stock market actually represents an outsized influence on its housing market (and outlying suburbs) than most local housing markets. The robust market conditions we’ve experienced in 2024 and 2025, with record profits and compensation, seem disconnected from the performance of other US markets, such as the Sun Belt.
We know the stock market is not the economy because it mainly reflects the future profits of a small slice of big companies, while the overall economy is everyone’s jobs, wages, and day‑to‑day spending.
So Barry’s earlier chart clearly illustrates the disconnect between the financial market performance and consumer experience. Right now, there’s a massive disconnect.
Home prices continue to rise despite higher rates
In a typical suburban housing market like Long Island, prices have continued to rise, despite the jump in mortgage rates since 2022. What’s missing from my above chart and a departure from typical housing economics has been the obliteration of listing inventory. The Fed held interest rates too low for too long, coming out of the pandemic. From 2022 through today, mortgage rates have remained higher, yet so have prices. It’s confusing consumers, as rock-bottom sentiment is making them question their ability to participate in the housing market, even if they could. Home sales remain low because affordability has been crushed by the combination of rising rates and rising prices, plus consumers remain very pessimistic overall, a combination I have not experienced in my 40 years of real estate analytics.
One other point. For the majority of my professional life, I have lived and worked in Manhattan, a city where the local economy is led by the financial markets sector. Up until the pandemic, the real estate news was chock full of stories of the real estate industry salivating over the prospect of a busy year after securities industry bonus announcements are made every March by the New York State Comptroller. Thankfully, there is less of that now as the media and the real estate industry are more informed than ever.
I’ve tried correlating Manhattan sales prices and sales over the years with the Dow, and it doesn’t hold. I had a glimmer of hope that I was onto something in the late 1980s by tracking sales against the Dow. But that correlation ended significantly about a decade ago, so I’ve put that aspiration to bed.
Final thoughts
Stocks at record highs and deeply negative consumer sentiment reflect a widening gap between the narrative of strong corporate profits and strained household finances. Gains are concentrated among large companies and wealthier households, while high rates and inflation pressure most consumers. In housing, low supply and locked-in formerly low mortgage rates keep prices elevated, even as affordability worsens and sales remain weak, pushing the market toward higher-income and cash buyers.
Consumers tend to read national housing market reports (remember, there is no national housing market) as if the results apply to their local housing markets. And in reverse, thinking local doesn’t enable them to apply their sentiment to the overall economy, yet it is in our nature as human beings.
You’re not alone.
The Actual Final Thought — Thinking tall. Manhattan wasn’t always tall towers.
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