US Economy: Housing Prices Cool at Record Pace

    US Economy: Housing Prices Cool at Record Pace
    Image copyright: Getty Images [via NBC News]

    The Facts

    • According to a new analysis from mortgage data analytics firm Black Knight, the annual rate of US home price appreciation fell from 19.3% to 17.3% in June - the fastest pace on record.

    • The slowing pace in home values indicates that rising mortgage rates and wider inflation are dampening demand for housing.

    The Spin

    Narrative A

    Since homebuying demand is low right now, it has given industries like homebuilding material suppliers and homebuilders freedom from the overwhelming pandemic-era demand and turbulence that drove up prices. The drop in demand will drop home prices, correcting the market and eventually bringing the US housing market back to normal.

    Narrative B

    While it might not be equivalent to the 2008 crash, the US housing market is headed toward a significant decline in both home buying and home construction. Anyone who recently bought a house to beat the Fed interest rate hikes will now be sitting at a loss, and home prices will only drop further, essentially depleting the market.

    Nerd narrative

    There's a 75% chance that the US will enter a recession by January 1, 2023, according to the Metaculus prediction community.

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