Do you remember the financial crash of 2008? It was driven in part by a bottoming out of the housing market.
New analysis from the online real estate company Redfin indicates that we may be on the verge of something even worse than that.
They estimate that U.S. homeowners have lost over $2 trillion in value just since last June. Does anyone expect these numbers to get better in the coming months?
Breitbart News reports:
Redfin: U.S. Homeowners Lost $2.3 Trillion in Value Since June
Homeowners in the United States have lost $2.3 trillion in total value since its peak in June, according to an analysis from Redfin.
“The total value of U.S. homes was $45.3 trillion at the end of 2022, down 4.9% ($2.3 trillion) from a record high of $47.7 trillion in June,” an analysis of the Redfin Housing Value Index claimed. The research indicated that the drop in total valuation across the United States is the “largest” drop in total percentage terms from June to December since 2008.
This is directly from Redfin:
While the total value of U.S. homes was up 6.5% from a year earlier in December, that’s the smallest year-over-year increase during any month since August 2020. This is according to an analysis of Redfin Estimates on more than 99 million U.S. residential properties.
The housing market has been shedding value because homebuyer demand has waned, which has also caused home prices to fall from their peak. The median U.S. home sale price was $383,249 in January, down 11.5% from a peak of $433,133 in May, and up just 1.5% from January 2022.
Homebuyer demand slowed in large part because rising mortgage rates—a consequence of the Federal Reserve’s effort to curb inflation—made purchasing a home more expensive. The average 30-year fixed mortgage rate was 6.36% in December. While that’s down from the 20-year high of 7.08% in November, it’s roughly double the level from the start of 2022. Rates fell at the beginning of February, giving buyers some hope, but have since crept back up to December levels.
People aren’t buying as much because people have less money and the cost of borrowing is higher.
Redfin data..worst 6 months for housing since 2008.
Full effects of rate hikes yet to kick in and the Uber Hawks want it higher. They will never be satisfied.
Anchoring off flawed lagging data. pic.twitter.com/H7dHlnGRY3
— James E. Thorne (@DrJStrategy) February 23, 2023
The next Republican administration has got to do things to spur the building of more housing. You know the Biden administration certainly isn’t going to do it.