Home prices continued to decelerate at the fastest pace on record in August—intensifying a decline since this spring that has some experts worried the abrupt turnaround in the housing market could ultimately push the economy into a recession.... [+]Home prices across the country climbed 13% in August on an annual basis, compared with 15.
In a statement, S&P managing director Craig Lazzara said the decline “clearly” shows the growth of home prices peaked this spring and that the “forceful deceleration . . . may well continue” as the Federal Reserve continues to move interest rates higher—making mortgage financing more expensive and housing less affordable amid an increasingly challenging economic environment.
So far, mortgage rates have skyrocketed from less than 3% during the pandemic to a 20-year high of nearly 7%—pushingto the worst level in decades and effectively “taking a wrecking ball to the housing market,” says James Stack of InvesTech Research. Stack says how the housing market ultimately unwinds will be a “determining factor” in the depth and duration of the “probable” recession ahead and notes the median homeowner’s mortgage payment now eats up more than 30% of their income—worse than during the 2005 housing bubble and exceeded only by the period of record-high interest rates in the early 1980s.“The message today is eerily similar to [the] warning in 2005,” says Stack. “It would be difficult to argue that the U.S.
Third derivative spotted in the wild
Let’s just be clear on what a catastrophe is unfolding in the housing market. It only grew 13% year on year How will we homeowners cope
Just the beginning of this housing bubble
The economy is already in a recession
Like they accelerated at the faster pace on record in 2020-21