Could This U.S. Housing Market Crash Be Worse Than 2008?
SeekingAlphaNov 04, 2022
According to the National Association of Realtors (NAR), sales of previously occupied US homes declined 5.9% in October, the ninth monthly drop in a row and the lowest pre-pandemic sales pace in over 10 years. They fell 28.4% from October last year to a seasonally adjusted annual rate of 4.43M.
One reported reason for the decline is lower inventory, with the number of houses on the market dropping 0.8% between September and October to roughly 1.22M. Meanwhile, high mortgage rates have discouraged homeowners locked in at lower rates from selling their homes.
With no way to predict the Fed's last-minute actions, Americans who bought a home in the last couple of years could very well get crushed by this housing market. If unemployment rises, the Fed's dangerous balancing act will topple over, and both buyers and sellers will be left out of a market that has seemingly only taken from the poor and given to the rich.
With the housing crisis admittedly playing a major role in dragging us into a recession, it will also play a role in pulling us out. Loan rates have likely peaked despite predictions of more Fed interest rates, which will only decline along with home loans, making it easier for Americans to get back to normal in the near future.