Home prices are declining at a rate not seen since 2008, when the Great Recession financially wiped out millions of American families.
Here’s the chart.
“Collapse” is too strong a word. The fall is modest, at least for now, at just 0.7% off of June’s record highs.
Although in Denver, previously one of the hottest markets, average home prices dipped by $25,000 — a decline of more than 3% — in just one month. They’re now below $800,000 for the first time since March, according to WestWord.
Tampa and Miami prices are still up, up, up, on a huge influx of new residents from other states, despite Lefty claims that Republican Gov. Ron DeSantis is running a murderous fascist regime there.
The good news is that younger, first-time buyers might be getting priced back into a market they’d previously been priced out of. That could take a while, though. USA Today reported on Friday that “the reality is that many buyers are likely to remain priced out of the market for quite some time.”
The hoped-for resale value of a home represents a large fraction of most Americans’ retirement savings. People who had hoped to sell any time soon and pocket the profits to finance their sunset years might need to hold out longer than planned and wait for the market to rebound.
Or they might want to lower their asking price and make a quick sale. There’s a risk the fairly gentle decline could turn into a rout.
The major reason for the decline in home prices is the increase in interest rates. But the Fed can’t — or at least very much should not — stop hiking rates until the inflation beast is tamed.
Inflation has accelerated every month for the past year, and every month but one going back to March of 2021. And there’s still a lot of inflationary excess liquidity out there in the form of “stimulus” funds sent to individuals and state/local governments.
With housing moving into a buyer’s market and portfolios struggling with massive losses in recent months, retirement is becoming more of a nightmare than a dream for many Americans.
It’s going to be a bumpy ride, getting over all of the self-inflicted harms we’ve suffered these last couple of years, so hang on tight.