Source: Hellenic Shipping News —
A retreat in U.S. house prices will extend into next year, although the expected 12% peak-to-trough drop predicted by analysts polled by Reuters would be just about one-third as severe as the last market correction 15 years ago.
Such a modest fall after a 40% rise in average house prices over the last two years based in part on a surge in demand for more space during the COVID-19 pandemic will not be enough to make housing affordable, analysts said.
House prices have doubled in the last decade but a doubling in mortgage rates since the start of this year from 3.3% to around 6.5% has brought the historic boom to a screeching halt.
Average U.S. house prices as measured by the Case Shiller 20-City index are forecast to rise 13.6% this year and fall over 5.6% in 2023, the Nov. 8 – Dec. 2 poll of 25 housing strategists showed. If realized, it would be the first full-year decline in house prices in a decade.
Average U.S. house prices peaked in June on this measure and are already down about 4% since then. They are expected to drop 12% in total, according to the median forecast, with estimates ranging as high as 30%.