The Federal Reserve (FED) is starting to worry about the U.S. real estate market: the market is clearly contracting, adding to recession concerns.

The Federal Reserve's latest meeting minutes this week have unusually included the weak housing market in the risk list, leading to speculation that the timing for interest rate cuts may be advanced, and both monetary policy and Trump’s new government's economic outlook face recalibration. (Background: SharpLink Gaming approved a $1.5 billion "stock buyback" plan, can SBET return to its yearly high?) (Supplementary background: Koreans are rushing to buy "crypto US stocks", BitMine becomes the top target) Fed Chairman Powell on Friday first hinted at a data-driven adjustment of interest rates in September, which the market interpreted as opening the door to easing, leading to a collective rebound in risk markets. However, few have noted that a seemingly bland meeting minute from the Fed earlier this week has already placed the real estate market in the spotlight, potentially rewriting the policy rhythm and market direction for the coming quarters. New focal points revealed in the meeting minutes According to the July Federal Open Market Committee minutes, decision-makers admitted that "economic activity slowed in the first half of the year, primarily driven by a slowdown in consumer growth and a decline in residential investment." In the past, the market often focused on inflation curves, but now the cooling housing market has formally been listed as a downside risk to employment, alongside tariffs and the impact of artificial intelligence. "Economic activity slowed in the first half of the year, primarily driven by a slowdown in consumer growth and a decline in residential investment." Cold data reflects the chill in the housing market The data provides the most straightforward signal. Although existing home sales slightly rebounded in July, most months in 2025 are expected to remain flat, while inventory for sale continues to accumulate. According to a report by Fortune on the 23rd, Citi Research pointed out that "housing price declines are rarely seen outside of rate hike cycles or recessions." Furthermore, the supply side is also grim: new single-family home building permits in July fell to the lowest level since 2019 (excluding the pandemic period), and the National Association of Home Builders ( NAHB ) Confidence Index turned negative in August. Mortgage rates have long remained in the 6% range, weakening home purchase demand and compressing builders' operations. The chain reaction of the housing market slowdown on the economy and policy Historical experience shows that a freeze in residential investment often foreshadows a recession. Recently, U.S. housing starts have decreased by nearly 24% year-on-year, and new single-family home sales have dropped by about 23.7% year-on-year, with up to 27% of properties in popular cities during the pandemic being listed at reduced prices. While falling home prices may accelerate the cooling of inflation, they simultaneously erode household assets and drag down consumption. For Fed Chairman Powell, pressure is coming from both sides. If interest rates are not cut, the housing market dip could spread to employment; if rates are cut early, there is a risk of inflation rewarming. Outlook and risks: how the market responds In the coming months, the housing market and employment reports will influence decision-making. If data continues to deteriorate, the Federal Reserve may initiate an easing cycle more quickly, but mortgage rates are unlikely to drop significantly in the short term, making home purchase demand likely to be "stuck halfway up the mountain." Investors also face a dilemma: expectations for interest rate cuts could help direct funds toward risk assets, including crypto assets, but if the economic slowdown expands, funds may flow back to safe-haven assets. With the Trump administration just taking office, maintaining the independence of the central bank under political pressure adds variables to this economic chess game. Related reports Ondo will launch Ondo Global Markets on 9/3, initially listing hundreds of tokenized stocks. The premium for coin hoarding is declining, and Bitcoin "reserve companies" are being overshadowed by the IPOs of US stocks. This article, "The Federal Reserve Begins to Worry About the U.S. Real Estate Market: The Market is Clearly Contracting, Adding Recession Concerns," was originally published in BlockTempo, the most influential Blockchain news media.