Housing Market Declines in 2022 Fueled by Interest Rates unlikely to Stop
The United States housing market peaked in June of 2022, but then declined by almost 5% in the second half of the year
- Written by Banking Exchange staff
The United States housing market peaked in June of 2022, but then declined by almost 5% in the second half of the year.
The last time the real estate market declined that fast, George W Bush was the President in the second half of 2008. Interest rates on 30 year mortgages also doubled last year making it increasingly difficult for buyers to enter the market.
The real estate market is down after a massive recovery fueled by the pandemic, and is still much higher than it was in 2019.
San Francisco and New York have fallen the furthest in terms of price declines, but in Florida the housing market continues to increase. Miami did not lose any of its housing market value in 2022.
Several southern suburban areas also enjoyed gains in 2022. The gains in Florida and in the south are primarily attributed to migration from northern states fueled in large part by the pandemic.
The negative effect on lending businesses have struck hard. A number of banks including Wells Fargo cut a significant percentage mortgage bankers earlier this week.