The Tax-Plus-Insurance Wedge: How Non-Mortgage Carrying Costs Became the Marginal Variable in American Housing

In late 2025, the New York Times published a piece identifying nine American metros that had seen the steepest property tax bill increases over the prior five years. The list: Indianapolis, Atlanta, Jacksonville, Tampa, Miami, Orlando, Dallas, Denver, and Fort Worth. All nine metros saw median property tax bills rise 45 to 65 percent between 2019 and 2024, often producing three-digit monthly cost increases on top of mortgage payments that were already at the affordability limit. The article appeared during the period when the broader housing-affordability conversation was still dominated by mortgage rate and price discussion. It received some attention. The structural significance of what it was describing did not.

The framework's reading is that this list — and the underlying dynamic the list reflects — captures the most consequential single shift in American housing economics over the past five years. The marginal variable that determines housing affordability is no longer the mortgage payment. It is the wedge of non-mortgage carrying costs: property tax, homeowners insurance, and (where applicable) HOA fees and special assessments. The wedge has grown wider than the headline mortgage payment in many specific metros. It has compounded faster than wages for five consecutive years. And it operates as a Fekete-an extraction mechanism that the household cannot directly negotiate, cannot refinance away, and cannot escape without selling the asset.

This essay is the fourth installment of the Watching the Cracks series and the framework's most direct engagement with the tax-and-insurance dynamic that the previous installment (Article 18, on Lakeland specifically) treated as the proximate cause of one metro's saleability collapse. Where Article 18 told the story of one metro under stress, this essay generalizes the analysis across the broader U.S. metro footprint, identifies the structural drivers of the wedge in each of its three components, and reads the trajectory through the framework Fekete left us.

The wedge, defined

The traditional American housing-affordability framework treats the monthly housing cost as a function of four variables: price (P), down payment percentage (D), mortgage rate (R), and term (T). The standard 30-year fixed-rate mortgage payment calculator produces the monthly principal-and-interest cost (M) as a closed-form function of P, D, R, and T.

This framework, which has dominated the housing-affordability literature since at least the 1970s, is now structurally incomplete in a way that produces consistent underestimates of actual household housing burden. The complete cost framework adds three additional variables: property tax (X), homeowners insurance (I), and HOA fees with embedded special assessment exposure (H). The total monthly housing cost in 2026 is therefore M + X + I + H, where the second three terms together constitute the carrying-cost wedge.

The wedge has three important framework-relevant properties.

First, it is non-negotiable. Unlike the mortgage payment, which the household can in principle refinance, restructure, or escape through sale or default, the carrying-cost components are tied to the property and cannot be separated from continued ownership. Property tax is set by the assessor based on assessment methodology that the household does not control. Insurance is priced by carriers based on actuarial models that the household cannot influence. HOA fees are set by board votes that the household has minimal practical influence over and that operate under state laws that increasingly require certain spending levels (Florida's post-Surfside Structural Integrity Reserve Studies, for example).

Second, it compounds independently of mortgage dynamics. A household with a 3% fixed-rate mortgage from 2021 — the asset that is supposed to be the financial bedrock of long-term household stability — experiences exactly zero benefit from the rate lock if their carrying-cost wedge has grown by $800 per month over the same period. The framework reads this as a saleability impairment that operates on the household's financial position even though the household's underlying asset is unchanged: the same home that was affordable in 2021 is no longer affordable in 2026 not because the mortgage changed, but because the wedge widened.

Third, it operates as a Fekete-an extraction in the precise structural sense. Each component of the wedge is a continuous claim on the household's cash flow that produces no offsetting service improvement, that cannot be refused without surrendering ownership of the asset, and that compounds over time at rates the household cannot meaningfully resist. This is the precise structural form of the capital erosion mechanism that Fekete identified at the macro level: a continuous extraction that depletes the productive capital of the affected unit while producing no offsetting productive growth.

The remainder of this essay examines each of the three wedge components in turn, identifies the structural drivers that have caused each to escalate, and reads the trajectory through the framework's broader monetary analysis.

Component 1: Property tax and the assessment regime divergence

Property tax in the United States operates under a patchwork of state-level rules that produce dramatic variation in how the tax bill behaves over time. The fundamental variable is whether the state caps annual increases in assessed value (the basis on which the tax is computed) or only the tax rate (the multiplier applied to assessed value), and how it handles reassessment when the property changes hands.

The strongest cap regime is California's Proposition 13, enacted in 1978. Under Prop 13, the assessed value of a property is locked at the purchase price (the "base year value") and can increase by no more than 2% per year regardless of market value movements. The tax rate itself is capped at 1% of assessed value (plus voter-approved bonds and special assessments, which typically push the effective rate to roughly 1.1-1.2%). When the property changes hands, the assessed value resets to the new purchase price.

The framework's reading of Prop 13 is precise. The regime produces strong protection for incumbent homeowners — a Californian who purchased a home in 1995 for $200,000 may now pay property tax on an assessed value of approximately $350,000 (35 years of 2% annual increases compounded), while the same home's market value is $1.8 million. The corresponding tax bill is approximately $3,500 per year against a $1.8 million asset, an effective rate of 0.19%. This is structurally identical to the saleability protection that Menger identified as characteristic of a senior monetary good: the asset's exchange value (market price) decouples from the extraction operating against it.

But Prop 13 is also a transfer of saleability from prospective buyers to incumbent owners. The buyer purchasing the same $1.8 million home today is reassessed at full market value, and pays approximately $20,000 per year in property tax — six times what the incumbent neighbor pays for the same physical asset. The framework reads this as a structural cleavage in California's housing market that has compounded across the post-1978 period: the incumbent population has been protected from the extraction that the entering population must absorb in full.

Florida's Save Our Homes provision operates similarly to Prop 13 but with weaker protection: assessed values on homesteaded properties can increase by up to 3% per year (or CPI, whichever is lower), and the cap does not apply to non-homesteaded properties (where assessed value can increase up to 10% per year). Florida also offers a $50,000 homestead exemption and a portability provision that allows homeowners to transfer up to $500,000 of accumulated assessment savings to a new Florida homestead within three years of selling the prior one. The combination produces meaningful but less complete protection than California's regime.

Texas's homestead cap is 10% per year — wide enough that during pandemic-era price increases, many Texas homeowners saw their assessed values rise by close to the maximum allowed amount even as the cap was nominally protecting them. The cap on non-homesteaded properties is 20% per year through 2026, and the state offers the largest homestead exemption in the country at $100,000 off the school district taxable value (saving roughly $1,300-1,500 per year at typical rates). Texas's over-65 freeze, which locks the school tax bill at the year the homeowner turns 65, is one of the strongest senior protections nationally.

New York operates a 2% tax levy cap at the municipality level, but this caps the aggregate property tax levy collected by a local government, not the individual property's assessed value. Individual properties can still see large assessment increases that translate to large tax bill increases, particularly in metros where reassessments have been deferred for long periods and then occur in concentrated cycles.

Illinois, Pennsylvania, and Ohio have no statewide assessment caps. Properties can be reassessed to full market value at any reassessment cycle (Illinois uses a 4-year cycle, Cook County uses 3 years), and the tax bill can move sharply between assessment cycles. The framework's reading is that the un-capped regimes produce more volatile household property tax burdens and contribute to the affordability stress visible in specific metros (Indianapolis being the prominent NYT-list example from an un-capped state).

The structural pattern visible across the assessment regime variation is this: the metros where property tax burdens have grown most sharply since 2019 are concentrated in states that combine no-cap or weak-cap regimes with rapid post-pandemic price appreciation. The NYT list maps directly onto this pattern. Indianapolis (Indiana, no assessment cap), Atlanta (Georgia, annual reassessment, weak protections), Jacksonville/Tampa/Miami/Orlando (Florida, Save Our Homes only covers homesteaded properties), Dallas/Fort Worth (Texas, 10% homestead cap is wider than 5-year price appreciation in many submarkets so the cap was non-binding), Denver (Colorado, biennial reassessment, no cap).

What this means in practice: a household in a no-cap or weak-cap state that purchased a $300,000 home in 2019 has seen the assessed value rise to $400,000-450,000 by 2024 in many of these metros, with the tax bill rising proportionally (often 45-65% as the NYT documented). The same household in California with Prop 13 protection would have seen the assessed value rise to approximately $325,000 over the same period — roughly 30% lower than the no-cap state equivalent.

The framework's reading is that the property tax cap regime is now a primary determinant of housing affordability trajectory in a way that the conventional analysis underweights. The household's choice of state at purchase locks them into a five-decade trajectory of either Prop 13-style protection or no-cap exposure, with implications that compound across the holding period.

Component 2: The insurance market dysfunction

Article 18 (Lakeland) examined the Florida insurance market in detail. This essay extends the analysis to the broader pattern of insurance market dysfunction that is now visible across multiple U.S. metros and that constitutes the most rapidly compounding component of the carrying-cost wedge.

The fundamental observation is that homeowners insurance — historically a routine cost of homeownership that escalated at roughly the rate of inflation — has decoupled from inflation in specific geographies over the past five years. The decoupling is driven by climate exposure (hurricane, wildfire, hail, flood), insurance market structure (state-level regulation that varies dramatically in how it handles catastrophic loss), and the reinsurance market dynamics that determine the cost of catastrophic backstop coverage.

Florida is the most acute case. Average homeowners insurance premium in Miami-Dade County approaches $15,715 per year (Insurify); Monroe County premiums exceed $22,000 per year. The Florida market saw 12+ insurance companies declared insolvent between 2019 and 2023. Citizens Property Insurance Corporation peaked at 1.42 million policies and $675 billion in exposure in October 2023, and was politically positioned as potentially unable to pay claims in a major hurricane scenario (though the corporation cannot legally become insolvent because it can levy assessments on all Florida property insurance policyholders). The Florida Insurance Guaranty Association levied four separate emergency assessments between 2022 and 2023.

California is following a similar trajectory in wildfire-exposed regions. State Farm announced in 2024 it would not renew approximately 30,000 California policies. Allstate withdrew from the California new-policy market. The California FAIR Plan — the state-managed insurer of last resort — saw policy counts triple between 2019 and 2024. Average premiums in fire-prone California zip codes rose 30-50% in three years. The framework's reading is that California is approximately two years behind Florida on the same trajectory, with the policy and political-economy response still in early stages.

Texas faces a related but distinct dynamic. Hail damage and severe thunderstorm exposure has driven Texas premiums to among the highest in the country, with the Texas Windstorm Insurance Association (the state-managed coastal insurer) functioning structurally similarly to Florida's Citizens. Average Texas homeowners insurance premium rose 40-60% between 2019 and 2024 in the most affected metros.

Colorado, Louisiana, and the broader Gulf Coast are all showing comparable stress patterns at varying magnitudes and timing.

The framework's reading of insurance market dysfunction extends beyond the specific state-level dynamics to a more general structural observation. Property insurance has been the historically-reliable substitute layer that translated household-level catastrophic risk into priced premium exposure, allowing households to occupy properties in catastrophe-prone geographies under the assumption that the premium would price the risk at affordable levels. This substitute layer is now failing in specific geographies. The framework reads this as structurally analogous to the failure of the agency MBS substitute layer that Article 8 of this catalog identified as the next major crisis vector: a paper substitute that worked under specific conditions has decayed in saleability as the underlying conditions have changed.

The Federal Reserve cannot fix this. The agency MBS substitute layer is at least nominally backstopped by federal guarantee. The property insurance substitute layer is backstopped by state-level reinsurance pools and state-managed insurers, with no federal backstop except in extreme circumstances (the NFIP for flood, which is itself structurally insolvent on a forward-looking basis). When the insurance substitute layer fails, the failure is metro-by-metro, state-by-state, with no central authority capable of generalizing the response.

Component 3: HOA fees and the post-Surfside reserve mandate

The third component of the wedge is HOA fees, including the embedded exposure to special assessments. This component is smaller in scale than property tax and insurance but is growing faster than either in specific geographies and producing the most acute individual-household shocks.

The defining event for HOA fee dynamics over the past five years is the Surfside condo collapse on June 24, 2021, in which 98 people died when Champlain Towers South partially collapsed in the middle of the night. The investigation revealed years of deferred maintenance and inadequate reserve funding — issues the Florida legislature subsequently determined were common across the state's older condo inventory.

Florida's legislative response was Senate Bill 4-D, signed by Governor DeSantis in May 2022. The law fundamentally changed how Florida condominiums are maintained and funded. All condo buildings three or more stories tall must undergo mandatory structural inspections ("milestone inspections") at 25 years of age (or 30 for buildings more than three miles from the coastline), with re-inspection every 10 years thereafter. More consequentially, Structural Integrity Reserve Studies (SIRS) are now mandatory for condo buildings three or more stories tall, and condo associations can no longer waive reserve funding for structural components. The SIRS covers ten building components: roof, structure, waterproofing, electrical, plumbing, windows, fire protection, elevators, paint, and pavement.

Before SB 4-D, an estimated 5-10% of Florida condo associations had properly funded reserves, and approximately half had no reserves at all. Associations had routinely voted to waive reserve contributions to keep monthly fees low. The framework reads this as a multi-decade deferral of maintenance costs that has now been forcibly recognized through a single regulatory mechanism, with the entire cost falling on current unit owners.

The empirical impact has been severe. Miami-Dade HOA fees rose 59% in five years, per Axios reporting. Tampa led the nation at 17.2% year-over-year HOA fee increases; Orlando 16.7%, Fort Lauderdale 16.2%. Special assessments of $50,000 to $200,000 per unit have become common, with the most extreme cases at Surfside-area buildings reaching $80,000 to $400,000 per unit.

The framework's reading is that the post-Surfside HOA dynamic represents a forced recognition of deferred maintenance liability that the previous regulatory regime had allowed to accumulate. The accumulated liability was structurally analogous to the unrealized losses on bank securities portfolios that Article 16 of this catalog examined: a liability that existed on the property but was not visible in current cash flow until a regulatory or market event forced recognition. Surfside was that event for Florida condo reserves; SB 4-D was the recognition mechanism; the SIRS process is the forced funding requirement.

Other states are watching the Florida response and considering similar legislation. California's HOA regulatory regime caps special assessments at 5% of the annual budget without member vote, providing some protection that Florida's pre-2022 regime did not have. But the underlying physical reality — aging condo inventory with decades of deferred maintenance — is not specific to Florida. Comparable dynamics are likely to emerge in other states with substantial pre-1990 condo inventory over the next 5-10 years.

For single-family homes in HOA-governed subdivisions, the dynamics are different but not necessarily less stressful. Single-family HOA fees average $100-300 per month in most U.S. metros but can spike in response to amenity maintenance costs, legal disputes, or insurance increases that flow through to the HOA's master policy. The framework predicts the single-family HOA dynamic will compound slowly through the rest of the decade, particularly in metros where master-policy insurance costs are escalating.

The wedge in numerical comparison

The framework's most useful single deliverable for the household reader is a direct numerical comparison of the wedge across representative metros. Take the case of a household purchasing a $400,000 home with 20% down at 6.23% mortgage rate, holding for 10 years, and comparing the total carrying cost across selected geographies:

Lakeland, Florida:

P&I: $23,594 per year
Property tax (2.1% effective): $8,400 per year
Insurance: $6,200 per year
HOA (suburban single-family, typical): $1,200 per year
Total annual carrying cost: $39,394
10-year cumulative: $393,940 (plus carrying cost escalation, which has averaged 8-12% annually in this metro)

Indianapolis, Indiana:

P&I: $23,594 per year
Property tax (Marion County, 1.8% effective): $7,200 per year
Insurance: $1,800 per year
HOA (suburban single-family, typical): $400 per year
Total annual carrying cost: $32,994
10-year cumulative: $329,940

Columbus, Ohio:

P&I: $23,594 per year
Property tax (Franklin County, 1.5% effective): $6,000 per year
Insurance: $1,400 per year
HOA (suburban single-family, typical): $400 per year
Total annual carrying cost: $31,394
10-year cumulative: $313,940

Sacramento, California (incumbent with Prop 13 protection):

P&I: $23,594 per year (assuming a recent purchase; incumbent owners would have much lower)
Property tax (1.1% effective on purchase price): $4,400 per year for first year, growing 2%/year
Insurance: $1,600 per year
HOA: $400 per year
Total annual carrying cost: $30,000-32,000
10-year cumulative: ~$300,000 (Prop 13 cap keeps property tax growth at 2%/year)

The cumulative carrying cost over a 10-year hold differs by approximately $93,000 between the Lakeland case and the Columbus or Sacramento case. This is the framework's quantification of the wedge: roughly $93,000 of additional household cash outflow over the holding period, with no offsetting service improvement and no escape mechanism short of selling the asset. The framework reads this as the operational form of Fekete's capital erosion mechanism applied to the household-scale economy: a continuous extraction that depletes household productive capital across the holding period, with no compensating productive output.

The political-economy dynamics

The wedge's three components have produced distinct political-economy responses across affected jurisdictions, with implications the framework can read.

California's "Save Prop 13 Act of 2026" is scheduled for the November 2026 ballot after the Reform California campaign submitted 1.35 million signatures. The measure aims to reinforce the existing Prop 13 protections against efforts to weaken them through legislative or initiative action. The framework's reading is that the measure is likely to pass, given the structural alignment between incumbent homeowners (who benefit from Prop 13) and the voting electorate. The passage will preserve the existing transfer from prospective buyers to incumbent owners that Prop 13 has produced across the post-1978 period.

Florida is considering eliminating most property taxes through a constitutional amendment under discussion in 2026 legislative sessions. The proposal — to abolish property tax for primary residences and replace the revenue through sales tax or other mechanisms — has political appeal in a state with high property tax burdens but faces serious revenue-replacement challenges. The framework's reading is that the proposal is unlikely to be implemented in its full form but may produce partial reforms (expanded homestead exemptions, additional age-related freezes, reduced rate caps) that incrementally reduce the property tax component of the wedge.

Florida's HOA regulatory response to Surfside (SB 4-D, with amendments through HB 913 in 2025 providing some flexibility) has shifted to a posture of trying to balance the structural integrity requirements against household affordability. The framework predicts continued legislative refinement over the next 2-3 years, with the eventual stable regime requiring lower reserve funding levels than the original SB 4-D mandated, in exchange for more rigorous inspection enforcement.

Insurance market reform has been most active in Florida, with the 2022-2023 reforms that produced the depopulation of Citizens having broadly succeeded at restoring private market function. California has begun similar reform conversations, including the FAIR Plan governance restructuring debate and the Insurance Commissioner's emergency rate filings. Texas has resisted comparable reforms, with state-level insurance market intervention remaining at the periphery of legislative priority.

What the framework reads across these political-economy dynamics is that the wedge's three components are politically resistant to systematic reduction. The property tax cap regimes are structurally protected against weakening (the California Save Prop 13 measure is an example of this). The insurance market reforms can stabilize but not retroactively reverse the premium escalation that produced the household-budget breaks of 2022-2024. The HOA reserve mandates can be moderated but not eliminated without exposing the underlying structural integrity problem that Surfside revealed.

The framework's prediction is that the wedge is structurally permanent in the affected metros at approximately current levels, with continued slow escalation rather than reversal. The household that has absorbed the wedge expansion of 2019-2024 should not expect the expansion to be undone; they should expect modest stabilization at current levels with continued 3-6% annual growth from this elevated baseline.

The framework's reading

The tax-plus-insurance wedge is, in the framework's vocabulary, the operational form of Fekete's capital erosion mechanism applied to the household scale. Fekete identified capital erosion at the macro level as the continuous depletion of productive capital through interest rate manipulation, monetary policy, and substitute-layer dynamics. The wedge produces the analogous depletion at the micro level: continuous extraction from household cash flow at rates that compound faster than productive output (wages), through mechanisms the household cannot directly negotiate, with no escape short of surrendering the underlying asset.

The framework's three central observations:

First, the wedge has now grown to a magnitude that meaningfully alters the housing-affordability calculation in specific geographies. A buyer comparing Lakeland and Columbus on price alone — both around $400,000 — sees comparable affordability. The same buyer comparing total cost-to-income ratios sees a meaningful structural advantage in Columbus, with the gap widening over time as the climate-and-insurance wedge in Florida continues to compound. The framework predicts that households making rational decisions on full carrying-cost terms will increasingly sort toward the lower-wedge metros, which will compound the geographic divergence visible in Article 17's metro saleability map.

Second, the wedge is not transient and is not amenable to monetary policy correction. The Federal Reserve cannot lower insurance premiums or property tax assessments. The Treasury cannot intervene in state-level reserve mandates. The substitute layer that has historically supported housing affordability — agency MBS, private mortgage insurance, federally-backstopped insurance pools — does not extend to the carrying-cost wedge components. Where the wedge breaks household budgets, it breaks them on a substrate that the federal government cannot directly stabilize.

Third, the wedge's permanence has structural implications for the housing market beyond the immediate affordability impact. Where the wedge is large and growing, housing saleability decays directly in the Mengerian sense: the asset's exchange properties become impaired because the bundle of costs attached to ownership cannot be readily transferred to a counterparty without comparable carrying-cost tolerance. The framework predicts that high-wedge metros will see continued home price decline relative to low-wedge metros, with the relative valuation gap widening across the next 5-10 years until the carrying-cost trajectory either stabilizes (allowing some recovery) or continues to compound (producing further saleability decay).

What households should take from this

The framework-aligned reader making housing decisions in 2026 should hold the following operational observations:

The wedge is now the dominant variable. Mortgage rate and price are no longer sufficient inputs for a housing affordability calculation. The household needs to compute the full carrying cost including property tax, insurance, and HOA fees, and project that cost across the intended holding period. A simple rule: the calculated 10-year cumulative carrying cost should be compared across candidate metros directly, with the cumulative gap (often $50,000-$100,000 between high-wedge and low-wedge metros) representing real household-level wealth implications.

Assessment cap regime matters more than headline tax rate. A 2.0% effective rate in a Prop 13 state compounds very differently than a 1.5% effective rate in an un-capped state, over a 20-30 year hold. The framework's preferred metric is the projected 30-year cumulative property tax bill under the relevant cap regime, not the current-year rate. Households planning long-term housing decisions should run this projection explicitly.

Insurance is the most rapidly-compounding component. In climate-exposed metros, insurance premiums have grown 40-100% in the past five years and are likely to continue growing at 5-15% annually for the foreseeable future. The framework predicts that insurance will overtake property tax as the largest non-mortgage carrying cost in many Florida and California metros by 2030. Households should weight insurance trajectory heavily in metro selection decisions.

HOA exposure should be evaluated structurally, not just on current fees. The current HOA monthly fee is one input; the embedded special assessment exposure (reserve funding adequacy, deferred maintenance, master-policy renewal trajectory) is often more consequential. The framework's specific recommendation: any HOA-governed purchase should include explicit review of the reserve study, board meeting minutes, and master-policy renewal history before commitment.

The framework's preserved case for buying (from Article 7 and Article 17) still applies. The framework is not arguing that housing is universally a bad investment. It is arguing that housing's saleability is structurally low, that the geographic heterogeneity in non-mortgage carrying costs has become the dominant variable in determining whether the framework's preserved case for buying applies in any specific metro, and that the wedge is operating as a Fekete-an extraction in specific geographies where the household should account for it explicitly rather than treating it as background noise.

What this means structurally

The framework's most consequential systemic prediction from the wedge analysis is this: the carrying-cost trajectory across the U.S. housing market is now diverging fast enough that household financial outcomes from housing decisions are increasingly metro-determined rather than skill-determined. A skilled financial decision-maker in Lakeland faces structurally worse outcomes than an unskilled decision-maker in Columbus, holding other variables constant, because the carrying-cost wedge in Lakeland will compound to roughly $90,000 of additional household cash outflow over a 10-year hold compared to Columbus.

This divergence is novel. Through the post-1971 housing regime, the dominant variables in household housing outcomes were the household's own skill (mortgage selection, timing, market knowledge) and the broader macro environment (rates, prices, employment). The geographic dispersion in non-mortgage carrying costs was modest enough that it did not dominate the household-skill variables. In 2026, the geographic dispersion in carrying costs has become large enough to overwhelm the household-skill variables in many specific cases.

The framework's reading is that this represents a regime shift in how American household wealth is accumulated and preserved through housing. The shift is not advertised, is not visible in the conventional affordability metrics, and is not yet broadly internalized in household decision-making. The framework's diagnostic apparatus is designed to make it visible. The wedge is the central tool.

The next installment of Watching the Cracks will engage the Q1 2026 FDIC Quarterly Banking Profile when it releases in late May 2026. The framework's predictions from Article 16 are now overdue for testing.

This is the fourth installment of "Watching the Cracks." It completes the housing diagnostic arc within the series (Articles 17, 18, 19 collectively constituting the metro-level housing saleability analysis). Subsequent installments will rotate between banking diagnostics (Q1 2026 QBP, ongoing bank failures, Federal Reserve enforcement actions), housing diagnostics (quarterly metro map updates, individual stress-metro deep-dives), and broader monetary indicators (Treasury auction stress, repo market dynamics, FX basis movements). The framework's prediction from this installment, recorded for future testing: the gap between high-wedge and low-wedge metros will widen further over the next 12 months, with at least three currently-yellow Sun Belt metros transitioning to red category by mid-2027.