Housing Market Expected To Crash In United States

Home prices are the topic at every gathering these days, ” When will the home prices fall?” or “Will the home prices ever go down?” While everyone has their own opinions, we can make a prediction about what might happen to the housing market by looking at some of the key points.

Housing Price Still High In US but maybe not for too long

While the home prices in the US and most of Europe are still high, countries like Canada, Australia, Sweden, and New Zealand are seeing an average of 6-7% month-to-month decline in the past few months. The housing market in these countries was super hot the past few years but suddenly they are slowing down. This leads us to believe that the US is on a similar path in about 10-12 months from now as companies start reporting loss and unemployment goes up.

Federal Reserve Is Slowing Down The Economy

Currently, a lot of “Would-be” buyers are unable to afford the home because of the high prices and interest rates. The federal reserve, which sets the interest rate knows that it has to kill the economy in order for it to rebound. Their priority is to slow down the inflation and the housing market is the major factor of slowing down the inflation.

In this process, a lot of people will lose their homes and we might even have a “middle-class” crisis, where we see the middle class move to poverty. Federal Reserve knows the consequence of this but will continue to raise the rates till we crash it. This does not mean that we have 2008 style of a crash, that will not happen but things will get pretty bad.

Home “Floor” Prices Still High

While the building permits and loan approval have all slowed down, we will still see high home prices because of the low inventory of homes for sale, but for how long?

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