For more than ten years, the housing market in the United States has been a beacon of stability. The housing market experienced an upward trend in home prices for 124 straight months, from February 2012 to June 2022. Although the housing boom peaked during the pandemic era, a sharp correction in home prices brought an end to the 124-month streak when the Fed decided to fight inflation.
Redfin Report: $2.3 Trillion in Home Value Lost During Housing Correction
The Case-Shiller National Home Price Index shows that through November, there has only been a slight decline in national home prices. However, homeowners are already beginning to feel the financial and psychological effects of the ongoing housing correction. The total value of homes in the United States has decreased by $2.3 trillion since the start of the housing price correction, according to a report released by Redfin on Wednesday. “At the end of 2022, the total value of American homes was $45.3 trillion, a decrease of 4.9% ($2.3 trillion) from the record high of $47.7 trillion reached in June. Since 2008, that is the largest percentage decline from June to December “Redfin researchers have written.
Even though home values have decreased, most homeowners have still made significant gains since the pandemic’s start. The housing market has lost some of its value, but most homeowners will still benefit greatly from the Pandemic Housing Boom, according to Redfin’s researchers. The value of all homes in the United States is still about $13 trillion higher today than it was in February 2020, the month the coronavirus was first identified as a pandemic.
The Ups and Downs of the US Housing Market: A Look at Home Prices
Is the decline in housing prices almost over? Whom you ask will determine the answer. Of the 29 major real estate forecasting companies, six believe that national home prices will either increase or remain unchanged in 2023, while 23 believe that national home prices will continue to decline this year. Officials from the Federal Reserve have acknowledged that they are closely monitoring the correction. The Federal Reserve believes that “valuations in both residential and commercial property markets remained high” and “that the potential for large declines in property prices remained greater than usual,” according to minutes from the most recent FOMC meeting that were made public on Wednesday.
Housing Market Forecast for 2023: Will Home Prices Continue to Fall?
This home price correction (or lack thereof) continues to vary on a regional basis, though. In 276 of the 400 largest housing markets in the nation that Zillow tracks, local home prices have decreased since their seasonally adjusted 2022 peak. 124 more markets are still trading at their 2022 peak price. The markets that have experienced the largest declines are disproportionately concentrated along the Pacific Coast and in the Southwest, including places like Bend, Oregon (down 9.2%), and Phoenix (down 6.3%).
Regional Variations in the Housing Market: Which Areas Are Seeing the Biggest Price Drops?
According to Goldman Sachs, the West, and East will continue to be divided. Goldman Sachs recently released a report in which it stated that regionally, “we project larger declines across the Pacific Coast and Southwest regions—which have seen the largest increases in inventory on average—and more modest declines across the Mid-Atlantic and Midwest regions—which have maintained greater affordability over the past couple of years.”
According to Fortune, the average 30-year fixed mortgage rate increased once more to 6.8% as of February 17. This is the highest level since November. The affordability of housing will be significantly impacted by this increase in mortgage rates. For instance, the monthly payment on a $500,000 mortgage with a 5.99% fixed rate at the beginning of February would be $2,995. A borrower would now have a $3,260 monthly payment on the same size loan if interest rates remained the same. Mortgage rates rose last week across the board due to market expectations that inflation will continue, necessitating the Federal Reserve to maintain its restrictive monetary policy for an extended period of time.
Making Informed Decisions: Using Property Records to Guide Real Estate Investments
In addition to providing a traditional mail option for accessing property information, Property Records of California also offers valuable resources for homebuyers seeking to gain a better understanding of the complex topic of property ownership. While it may seem straightforward, property ownership is a multifaceted issue that requires a closer look. The mere possession of a property and holding its title does not always guarantee ownership, as other factors such as liens, easements, and mortgages can impact ownership rights.
As such, it is important for buyers to be aware of the different types of property ownership, including sole ownership, joint tenancy, tenancy in common, and community property, in order to make wise decisions about their real estate investments. Property Records of California serves as a valuable partner for those seeking to navigate this complex landscape with ease.