The U.S. housing market is flashing warning signs, and investors would be wise to take notice. Declining housing starts, soaring mortgage rates, and inventory imbalances are aligning to signal a potential recession, with implications for equity markets and portfolio resilience. This article analyzes housing’s role as a leading economic indicator and outlines defensive investment strategies to navigate the coming slowdown.

Housing’s Recessionary Signals: Data and Disruption

The U.S. Census Bureau’s May 2025 report reveals housing starts plummeted to a five-year low, dropping 9.8% to an annualized rate of 1.256 million units. Multifamily construction, a key driver of urban investment, fell 30.4%, while single-family starts stagnated at…