Is The U.S. Headed For Housing Crash?

Here’s what could happen next…

It is now being predicted by experts that a combination of rising mortgage rates along with a decline in home sales and a record price slowdown are all now working together and could soon house a housing market crash. 

According to The Hill, the mortgage rate peaked just over 7% this week for the first time in 20 years and home prices saw their first slowdown in August. Additionally, new home sales dropped by 11% in last month as well. These are all signs of a housing crash.

However, some experts are saying that this is a market correction due to two years of rapid growth and while it does look the 2008 housing collapse, this is not it.

Redfin Deputy Chief Economist Taylor Marr explained, “Until this month, the pullback in the housing market could be described as something of a return to pre-pandemic conditions before sub-3% mortgage rates ignited a homebuying frenzy in 2020 and 2021.”

Marr added, “But now both mortgage purchase applications and pending sales are below 2018 levels. A four-year setback is a serious correction. With mortgage rates still elevated, we are in for further sales declines, but those should eventually bring price relief to those who need to move this winter,”