The Facts

  • According to the S&P CoreLogic Case-Shiller index, US house prices logged a 15.8% increase in July over the same month in 2021, lower than the 18.1% annual increase recorded in June and the fastest slowdown of gains on record.

  • The cooldown in the market comes as mortgage rates have surged — with the 30-year-fixed mortgage breaching 6% in September for the first time since the 2008 crash — and as the Federal Reserve (Fed) continues to rate hikes in response to record-high inflation.


The Spin

Narrative A

While it might not be equivalent to the 2008 crash, the US housing market is headed toward a significant decline in both home buying and home construction. Anyone who recently bought a house to beat the Fed interest rate hikes will now be sitting at a loss, and home prices will only drop further, essentially depleting the market.

Narrative B

Since homebuying demand is low right now, it has given industries like homebuilding material suppliers and homebuilders freedom from the overwhelming pandemic-era demand and turbulence that drove up prices. The drop in demand will drop home prices, correcting the market and eventually bringing the US housing market back to normal.


Articles on this story

Sign up to our daily newsletter