Concerns about inflation are impacting the US economy, especially hitting the housing market. While house prices remain higher than a year ago, they have been steadily declining since June due to inflation worries and increasing mortgage rates.
According to Ben Graboske, president of Black Knight, a mortgage software and analytics firm, the slowdown in the housing market is evident in the top 50 metropolitan areas, with some experiencing even more significant cooling. In June, 25% of major US markets saw growth slow by three percentage points, with four markets decelerating by four or more points in that month alone.
Interestingly, the largest decreases in house values are observed in areas that previously had very high prices, such as Denver and San Francisco. Currently, there is a balance between housing supply and demand, causing a drop in prices.
This is the fastest housing market collapse in modern history (bottom pane, rate of change).
The CEO of the National Association of Homebuilders says we are already in a housing recession. Which means ~18% of GDP is now at risk:https://t.co/3098wEgD0A pic.twitter.com/1Kianrmn50
— Mac10 (@SuburbanDrone) July 31, 2022
Graboske mentioned, “With a national shortage of more than 700,000 listings, it would take more than a year of such record increases for inventory levels to fully normalize.”
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