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Source: AS — 

The housing market is down from its peak in the summer of 2022 cooled by rising borrowing rates and many previously red-hot markets being overvalued. But will the US see a housing market crash in 2023?

While the general downturn is expected to continue, it depends on which market, with four potentially set for a major correction. Other markets though could come through with but a scratch and some even seeing slight gains.

Surging housing prices halted

The Federal Reserve dropped interest rates to near zero to help impulse the US economy devastated by the onset of the covid-19 and the disruptions it caused around the world. That helped push mortgage rates to historic lows and gave homebuyers the chance to purchase with much cheaper credit.

When combined with the mass migration of Americans who no longer had to live close to where they worked as remote working became the norm for those who could along with those who moved spurred by the pandemic to make a change in their lives, it sent house prices soaring across the nation. However, the Fed began tightening monetary policy last year with a series of aggressive rate hikes to rein in inflation that pushed home loan borrowing costs to their highest since 2002.