Pantheon Macroeconomics predicts a 20% decline in US house prices

Higher Fed rates and more expensive mortgages are driving down demand for US housing, which could push prices down by 20% next year. About it informs TV channel CBS with reference to the chief economist of the research company Pantheon Macroeconomics, Ian Shepherdson.

“We expect the decline in home sales to continue until early next year. By then, the buyers’ market will be dominated by people who buy homes for reasons such as changing jobs, moving for family reasons, etc., the economist believes. speculative reasons are disappearing from the market as mortgage rates skyrocket.”

During the COVID-19 pandemic, US house prices record grew up. By data US residential property price index S&P CoreLogic Case-Shiller Indices from S&P Dow Jones Indices, prices increased by 18.8% in 2021 alone. This has become a record since 1987, when such calculations began to be carried out. Analysts attribute the record rise in residential real estate prices to a combination of several factors.

“We have previously assumed that the high demand in the US housing market is associated with the reaction of people to the COVID-19 pandemic – they decided to change their place of residence (leaving the city, where it is easier to stay during lockdowns.— “b”),” said S&P DJI Managing Director Craig Ladzara. The active buying could also have been affected by the Fed’s low discount rates – people were rushing to make a deal and take out a mortgage before the Fed began raising rates at the end of last year. Since the beginning of this year, economists have been expecting rates to rise and demand to cool, which is what is happening in the end. From June to September in a number of cities prices are already decreased by 8-10%, mainly in those states where they previously grew the fastest – Florida, California, Arizona, South Carolina, Utah, Colorado.

Evgeniy Khvostik