Since peaking in June 2022, U.S. home prices have fallen 2.7% on a seasonally adjusted basis, the second biggest home price correction of the post–World War II era. Though historically significant, that drop in single-family home prices is a minimal reduction compared with the 26% peak-to-trough drop recorded between 2007 and 2012, Fortune reports.
A housing affordability crisis caused by fast-rising mortgage rates coupled with a 41% increase in home prices during the pandemic has forced the U.S. housing market into correction mode, but experts say a housing recession could actually be for the best.
“Coming out of the pandemic, [mortgage] rates were very low, people wanted to buy houses, they wanted to get out of the cities and buy houses in the suburbs because of COVID. So you really had a housing bubble, you had housing prices going up [at] very unsustainable levels and overheating and that kind of thing. So, now the housing market will go through the other side of that and hopefully come out in a better place between supply and demand,” [Jerome] Powell said in November.
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