Home News These 2 maps show the U.S home price correction is sharper—and more widespread—than previously thought

These 2 maps show the U.S home price correction is sharper—and more widespread—than previously thought

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pandemic housing boom US home prices rose 42%. Going forward, some of these profits will be eliminated.

on tuesday, Correction of return fee finally appeared Case-Shiller US National Home Price Index, because the July reading was 0.24% lower than the June reading. It was the first month-on-month decline in house prices since 2012.

Although this is a small numerical drop in the Case-Shiller index, it still clearly indicates an orbital change. Since the Case-Shiller Index is a three-month lagged average, the decline is also larger than originally expected. This means that July’s price drop was sharp enough to erase all his May and his June gains.

It will take months for resale indices like Case-Shiller (the industry’s gold standard for measuring residential real estate prices) to tally the actual home price declines. Agents and builders alike testifying across the country.

for better understanding Home price adjustments in progressLet’s take a look at a more up-to-date house value index calculated by Jiro and John Burns Real Estate Consulting. While we wait for the Case-Shiller Index to catch up, these indices give us a good idea of ​​what happened to local house prices through the end of August.

View this interactive chart on Fortune.com

Among the 148 major housing markets tracked by John Burns Real Estate Consulting (see chart above): Home prices fall from 2022 peak in 98 markets. 11 markets, Barnes Home Value Index* Already reduced by more than 5%.

Historically speaking, U.S. house prices typically only fall significantly when supply gets high enough that the beleaguered sellers finally give in. In this housing cycle, not oversupply It’s not a flood of needy sellers, but home prices are still starting to fall.

“Our view is that even if supply levels aren’t rising, home prices will fall,” said Rick Palacios Jr., head of research at John Burns Real Estate Consulting. increase. luck.

Why are prices falling? In short, squeezed and affordable. A combination of skyrocketing mortgage rates —reached just 7%-When bubbled house prices We have pushed new monthly payments far beyond what many buyers can afford. Other borrowers had to fall below a certain debt-to-income ratio, making them completely ineligible for mortgages.

View this interactive chart on Fortune.com

Of the 150 largest domestic housing markets tracked by Zillow (see chart above), 89 have seen home prices fall from their 2022 peak. in 10 markets, Zillow Home Value Index It has already decreased by more than 5%.

The housing market that sees the sharpest house price corrections is either the ‘Nasdaq’ or the ‘bubble’.

The so-called “NASDAQ” group are high-cost tech hubs such as San Jose (down 9% from 2022 peak), San Francisco (down 7.8%) and Seattle (down 6.2%). Not only are their luxury homes sensitive to interest rates, so is their technology sector.However See all the startup layoffs for 2022.

the second group is bubbling market Austin (down 7.4%), Boise (down 5.3%) and Phoenix (down 4.4%). The work-from-home boom has disconnected these markers from their underlying fundamentals. According to Moody’s Analytics, especially in these three markets, are priced at least 50% higher than what local income has historically supported.That’s why frothy markets like Austin and Boise First to see house prices fall.

Big Picture Point: This month we learned: The correction in U.S. house prices is sharper and more widespread than previously thought.

Want to stay up to date on housing fixes? Follow @NewsLambert on Twitter..

This story was originally Fortune.com

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