What happened last time? › Combinations
What happens when mortgage rates are above 7% and housing starts fall 20%?
It has happened 11 times since 1971. A year after it began, the S&P 500 was up 9 of 11 times, with a median move of +9.9%. On an ordinary day in the same years the median was +11.1%, up 76% of the time.
30-year mortgage rate above 7 · Housing starts down more than 20% over a year. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +2.2% 82% up · n 11 · normal +1.1% | +9.9% 82% up · n 11 · normal +11.1% | +42.6% 91% up · n 11 · normal +31.4% |
| Gold | +0.7% 55% up · n 11 · normal +0.2% | -4.9% 45% up · n 11 · normal +6.1% | +5.9% 55% up · n 11 · normal +13.9% |
| Oil | 0.0% 36% up · n 11 · normal 0.0% | -1.2% 45% up · n 11 · normal +3.9% | -17.1% 36% up · n 11 · normal +15.9% |
| 10-year yield (pts) | -0.27 pts 27% up · n 11 · normal -0.01 pts | +0.50 pts 55% up · n 11 · normal -0.02 pts | -0.57 pts 36% up · n 11 · normal -0.29 pts |
| Inflation, CPI y/y (pts) | +0.09 pts 67% up · n 9 · normal -0.01 pts | +0.35 pts 55% up · n 11 · normal +0.03 pts | -1.75 pts 27% up · n 11 · normal -0.25 pts |
| Unemployment rate (pts) | 0.00 pts 36% up · n 11 · normal 0.00 pts | +1.00 pts 64% up · n 11 · normal -0.30 pts | +1.10 pts 82% up · n 11 · normal -0.70 pts |
Median move after each episode began, how often it rose, and how many episodes had data. "Normal" is the same move from any trading day in the same years.
Every time it happened
- 1990-11-19 · true for 127 trading days · S&P 500 a year later: +18.8%
- 1990-01-18 · true for 1 trading day · S&P 500 a year later: -1.8%
- 1988-01-21 · true for 38 trading days · S&P 500 a year later: +17.9%
- 1985-03-19 · true for 19 trading days · S&P 500 a year later: +31.2%
- 1984-09-19 · true for 20 trading days · S&P 500 a year later: +9.9%
- 1981-09-17 · true for 188 trading days · S&P 500 a year later: +4.6%
- 1980-04-16 · true for 129 trading days · S&P 500 a year later: +32.7%
- 1979-12-18 · true for 42 trading days · S&P 500 a year later: +22.7%
- 1979-05-16 · true for 22 trading days · S&P 500 a year later: +8.7%
- 1978-04-17 · true for 1 trading day · S&P 500 a year later: +7.2%
- 1973-10-17 · true for 463 trading days · S&P 500 a year later: -35.3%
- 11 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- Try enough situations and one will look like an edge by chance.
- Macro numbers are as published at the time. Stocks include companies that later died.
- How these numbers are made.
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