Real Estate Housing Market: How Much Prices Have Fallen?

Since the Federal Reserve started fighting inflation, mortgage rates have gone up to their highest levels in 20 years. This has had a quick and big effect on the U.S. housing market.

Since May, home values in some local markets have shifted downward, and the biggest shifts are in the West, mainly in states that went wild during the housing frenzy.

The S&P Case-Shiller national home price index shows that home prices have gone up by about 43% since the COVID-19 pandemic began.

Is the housing market crashing?

Prices went up even more quickly in the West. The median price of a single-family home in Salt Lake County went up by 63% from $400,000 in March 2020 to over $650,000 in May 2022.

While the Federal Reserve's fight with inflation and higher mortgage rates are tempering demand, they aren't addressing a key issue that drove home prices higher each year.

The U.S. still has a nationwide housing shortage, especially in fast-growing areas like the West, despite Utah's housing boom in 2021.

The depth of today's housing correction is unclear. Economists say a 2007-like housing crash would require a major economic shift and widespread layoffs.

Big banks and other mainstream firms predict the housing correction will continue into next year, with forecasters predicting single-digit home price declines.

Most counties' home prices are still rising year after year, though some are only rising by single digit percentages while others are rising by double digits.