A big new report on housing prices is out, and the results are not what you would call “positive.” Or “glowing.” Or “good news for homeowners.” How bad is it? Well, the U.S. housing market as a whole suffered its most significant drop in value since 2008.
That is according to a report from Redfin, the real estate brokerage firm, and the most staggering number is the total value of U.S. homes which fell $2.3 trillion from June 2022 until the end of the year.
That is a decline of almost 5%. It will go down as the most significant drop in percentage since the financial crisis of 2008, when prices plummeted by 5.8%.
This news will shock homeowners who took advantage of the soaring home prices during the pandemic. It was a couple of years ago when prices rose faster than any time since the 1970s as mortgage rates hit record lows.
The government was handing out free cash almost as fast as they could print it as people packed up from cities and headed out to suburban areas with a strong wifi signal so they could work from home.
The good times stopped rolling when the Federal Reserve raised interest rates to try and slow down inflation.
Just over a year ago, mortgage interest rates were about 3.92%. In February of 2022, they soared to 7.08% and are now sitting at 6.5% this week. That’s according to Freddie Mac.
The median price of homes sold has fallen big time. In January, that number was $383,249; in May of 2022, it was $433,133.
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