With inflation ticking up, mortgage rates stuck near 7%, and growing political pressure on the Federal Reserve, the housing market slump is raising red flags for the economy and driving demand for the long-term security of gold.
Moody’s Analytics Chief Economist Mark Zandi is calling housing a looming economic threat, warning that the market is turning from a drag into a “full-blown headwind.” At the same time, the Trump administration has ramped up its public criticism of Fed Chair Jerome Powell, casting doubt on the central bank’s leadership just as rate decisions grow more consequential. With gold rising over 25% in 2025, the precious metal has cemented its place as the top refuge for investors navigating uncertainty.
“The housing market is the red flare,” Zandi wrote in a post recently, warning that home sales, new construction, and even prices are poised to slump unless mortgage rates fall “materially and soon.” But that looks unlikely. According to the Bureau of Labor Statistics, shelter remains the largest contributor to monthly inflation. The June CPI report showed the shelter index rising 3.8% year over year, highlighting housing’s stubborn role in driving up costs and complicating the Fed’s path forward.
Meanwhile, political turmoil is adding to the uncertainty. The Trump administration has openly criticized Powell over cost overruns on the Fed’s D.C. renovation project, fueling speculation about a possible shake-up in leadership. “We’ve got a real problem of oversight and excess spending,” said National Economic Council Director Kevin Hassett on CNBC. That dispute comes as the White House escalates tariff threats, which many economists warn could fuel another wave of inflation.
It’s a messy backdrop, and one that’s left the Federal Reserve stuck between a rock and a hard place. High housing costs are hurting Americans and suppressing homebuying activity, but rate cuts may not come soon enough to offer relief. Markets now expect the Fed to hold rates steady at its next policy meeting, awaiting further clarity on the inflationary effects of new tariffs and global trade disruptions.
For prospective buyers, it’s a lose-lose scenario. According to Bankrate’s latest Mortgage Rate Sentiment Survey, more than half of all U.S. adults say they wouldn’t feel comfortable buying a home this year regardless of where rates go. The affordability crisis is so severe that even homebuilders are pulling back, delaying land purchases and abandoning rate buydown incentives because they’re “simply too expensive,” Zandi noted.
That’s where gold comes in.
Unlike housing or stocks, both of which are highly sensitive to Fed policy and economic swings, gold has steadily skyrocketed 37% since this time last July. It doesn’t rely on low interest rates, mortgage activity, or consumer confidence. It thrives in the kind of high-risk, low-trust environment that seems to define today’s economy.
In times like these, investors aren’t chasing profits — they’re preserving peace of mind. That’s why gold, with its long history as a store of value, is attracting renewed attention. When headlines bring more questions than answers, gold offers something rare: certainty.
At Reagan Gold Group, we help clients protect their savings by offering physical gold and silver through IRS-approved IRAs and secure delivery options. When traditional markets falter and uncertainty rises, gold offers a level of confidence few assets can match.
Book your FREE consultation today and discover how gold can bring clarity, security, and peace of mind — even when the rest of the economy feels out of control.
