Real Estate Plummets in Second Biggest Drop Since WWII

Real Estate Plummets in Second Biggest Drop Since WWII

(RepublicanDaily.org) – House prices are falling across the US, in what market analysts say is the second-biggest “correction” since WWII. Experts say the slump is being caused by economic uncertainty and fear of interest rate rises. Whatever President Biden says, it doesn’t look like Americans are confident the economy is heading in the right direction.

Financial expert Mitch Roschelle of Macro Trends Advisors talked to Fox News on December 30, and said the drop in house prices is being caused by “uneasiness” about the economy and a lack of confidence in the housing market itself. House prices are still high thanks to a surge during the COVID pandemic — last October, they were 38.1% above where they were in March 2020 — but they’ve been falling steadily since a peak early last year. Now Rochelle predicts prices will drop to 10-15% below the peak.

While the fall in prices is bad news for anyone with much of their wealth tied up in property, it’s good news for anyone looking to buy a home. Roschelle said, “power has completely shifted from seller to buyer.” Homes are on the market, but they’re not attracting the competing bids that drive up prices.

Of course, part of the reason for the lack of competing bids is potential buyers are unsure of where interest rates are going to settle. People are reluctant to commit to a mortgage when the rate could be lower in a few months. As long as uncertainty lasts, demand will stay low, and prices will keep sliding. In fact, Roschelle warns, it could get even worse. He said, “if we start seeing layoffs… it could be something that causes a leg down in the housing market in a big way.”

The good news for homeowners is not all the value their property has gained since 2020 will be wiped out. In fact, according to Roschelle, no more than a third of the gain will be reversed. For now, though, it’s definitely a buyer’s market — if buyers can be found.

Copyright 2023, RepublicanDaily.org