US housing prices are down 5% since May and economists say that they could drop as much as 20% by mid-2023.
The chief economist at Pantheon Macroeconomics (PM) says that US housing is in a recession and prices will continue to fall amid the Federal Reserve’s interest rate hikes and efforts to bring down house prices.
“The deceleration in housing prices that we’re seeing should help bring prices more in line with rents and other housing-market fundamentals. And that’s a good thing,” said Fed Chair Jerome Powell.
This could spell good news for consumers as US rental prices fell for the first time last month since November 2021. US home sales also declined for seven months in a row, bringing prices down nearly 6% from peak pricing in June.
The economists from PM added that the current housing downturn wouldn’t necessarily crash the US economy but the Fed and economists are still keeping a watchful eye on the unprecedented inflation numbers.
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