Is the housing boom about to bust? Sellers are slashing prices at levels not seen since before the pandemic amid rapidly cooling market as hedge fund manager of The Big Short fame warns ‘It’s like watching a plane crash’- Daily Mail
After two years of hot housing market, experts fear the boom is over, as mortgage rates rise and inflation soars. Michael Burry, the hedge fund manager who wrote the book The Big Short, said the market is like watching a plane crash.
The chief economist with real estate giant Redfin said that home sellers are lowering their prices to attract buyers. The worst hit was Boise, Idaho, where 40% of homes on the market were lowered.
The housing market in Boise, Idaho, has seen more than 40% of homes on the market see their prices cut by owners in April 2022. Several other cities have seen more than 30% of homes on their respective markets see their prices lowered.
According to CBS News, Realtor’s Chief Economist Danielle Hale said that interest rates for a fixed 30-year home loan reached 13-year high of 5.3%. Hale added that some buyers are taking a step back and reassessing their options because the costs are just too much.
Despite sellers lowering prices across the country, the average house price in the United States in April was $425,000, up more than 30% from 2020. Several economists predict that house prices could drop by as much as 40% in 2022.
The rise in house prices comes as demand continues to outstrip supply due to the Covid-19 pandemic. The National Association of Realtors said that house sales fell again in April 2022 for the third straight month.
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