US Housing Market in doldrum
After a record-breaking run that saw?mortgage rates?plunge to all-time lows and home prices soar to new highs, the U.S. housing market finally started slowing in late 2022. Mortgage companies engaged in mass layoffs, real estate economists lamented a “housing recession” and home prices seemed poised for a correction.
But a strange thing happened on the way to the housing crash: Home values started rising again. In fact, housing prices have increased for four months in a row, according to the latest?Case-Shiller home price index. NAR says more than half of U.S. metro areas registered home price gains in the second quarter of 2023.
Can housing crash?
The last time the U.S. housing market looked so frothy was back in 2005 to 2007. Back then, home values crashed with disastrous consequences. When the?real estate bubble?burst, the global economy plunged into the deepest downturn since the Great Depression. Now that the housing boom is threatened by soaring mortgage rates and a?potential recession, buyers and homeowners are asking a familiar question: Is the housing market about to crash?
Key housing market statistics
According to Bankrate’s national survey of large lenders, the average?mortgage interest rate?on a 30-year loan was 7.12 % as of Aug. 9 — the highest level since 2002. Home sales fell 3.3 % from May 2023 to June 2023, the National Association of Realtors says. The decline since June of last year was 18.9 %. The nationwide median sale price in June 2023 was $410,200, a 0.9 % year-over-year decrease. June saw a 3.1-month supply of housing inventory, still well below the 5 to 6 months needed for a healthy, balanced market.