The housing market in the United States is experiencing the second realignment of housing prices since World War II.
Macro Trends Advisors founding partner Mitch Roschelle said the correction was due to Americans’ skepticism about the markets and their “uncertainty” about the economy. He explained on “Varney & Co.” Friday that the “dropping shoe” will be if the country begins to see an increase in unemployment, which will cause a “foot on the ground” in the housing market.
“A number of things are going to make it change, meaning that house prices are going up. One thing is for sure. And if you don’t know if interest rates are going to go up or not. I think that’s what’s driving a lot of people away from buying because they don’t know if prices are going to be cheap in two months, and they just have to wait,” Roschelle explained to FOX Business’ Ashley Webster.
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“And the other thing is economic instability. And I think the bottom shoe would be if we start to see people out of work, and start to see unemployment start to rise, I think that’s going to be the cause of the leg down in the housing market a lot.”
Roschelle’s comments come in the wake of major energy changes taking place in the housing market. Arguing that power has “completely changed[ed]”Stay away from the dealers, “continue to” restrict” the country’s struggling environment.
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“Right now, I’d say it’s a buyer’s market. I think the power has completely shifted from the seller to the buyer. That’s not to say that you don’t see some wars because again, I think in terms of the whole country, we’re at 3.3 months. So it’s still low,” Roschelle said.
“So, if there’s a house that comes on the market that’s good, and it ticks all the boxes for buyers and there’s buyers on the market, I think you can see wars starting, but mostly, you know, it’s one or two people chasing that house. And we we don’t see it.
In addition to the crisis in housing markets and demand, the average home price is expected to decline from its pre-pandemic peak.
According to Fortune.com, home prices in the United States in October 2022 are 38.1% above March 2020. Roschelle predicts that average home prices should drop by 10% to 15% from their peak in 2022.
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“10% to 15% [prediction] it has peaked in 2022, when we get to assuming house prices are down 10 to 15%. Which if we are talking about a stock market, it will look like a correction, but not a bear market. What’s important to remember is that since February 2020, house prices have risen to 40% where we are today,” said a real estate expert.
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“So what we’re doing is returning maybe, a third or a quarter of the profits we’ve made. But that doesn’t help someone who just bought a house at the top of the market and now they’ve got something that’s lost 10%,” Roschelle concluded.