The Housing Market Is Worse Than You Think
Abstract
In July, the same index recorded its first month-to-month price drop since January 2019, a relatively small decline of 0.3 percent - a sign that a reversal could be underway, though prices were still up a whopping 15.8 percent above July 2021. Moody's Analytics expects prices to drop 10 percent, from June to summer 2024, but if a recession hits, an increasingly likely scenario, prices could drop 20 percent. Another firm, John Burns Real Estate Consulting, predicted in May, when mortgage rates reached 5 percent, that national home prices would fall 10 percent through 2024. Active listings were up nearly 27 percent in September, compared to September 2021, but still 40 percent below September 2019, before the pandemic. The Phoenix metro area saw prices rise more than 4 percent in September, compared to September 2021, but inventory shot up 167 percent in the same period, the most among the 50 largest metros. Adjustable-rate loans have gone from about 4 percent of the mortgage market in 2021, to more than 12 percent in the last several weeks, the highest share in more than a decade, said Mike Fratantoni, the chief economist at the Mortgage Bankers Association. The median rent in September, $3,982, was up nearly 24 percent from a year ago, though it was down 2 percent from the previous month, according to a report from Douglas Elliman, a real estate brokerage.