Concerns about rising prices are impacting the entire economy of the United States, and one sector that is particularly affected is the real estate market. Even though house prices are generally higher compared to this time last year, they have been steadily decreasing since June due to the aforementioned concerns about rising prices and the increasing mortgage rates.
Ben Graboske, the president of Black Knight, a company that provides mortgage software, data, and analytics, stated that “The decline in growth was widespread among the top 50 metropolitan markets, with some regions experiencing an even more significant slowdown. In June, 25% of major markets in the US saw a decrease in growth of three percentage points, and four areas experienced a deceleration of four or more points in that month alone.”
Interestingly, the largest price drops in real estate have occurred in locations like Denver and San Francisco, where prices were previously at their peak. Currently, there is an adequate supply of homes available, which has led to the decrease in prices due to the equilibrium in supply and demand.
The rapid decline in the real estate market is unprecedented in recent history (lower graph, rate of change).
The CEO of the National Association of Homebuilders has remarked that we are currently in a real estate downturn. This implies that approximately 18% of the GDP is now in jeopardy:https://t.co/3098wEgD0A pic.twitter.com/1Kianrmn50
— Mac10 (@SuburbanDrone) July 31, 2022
“Given the current national shortage of over 700,000 listings, it would take more than a year of such record increases for inventory levels to return to normal,” Graboske added.
