CoreLogic economist Thomas Malone recently noted how U.S. home prices are dropping less fast than prices in Canada, New Zealand, and Australia. You can see this in the chart I’m excerpting above.
As of last month, U.S. home prices were up 41.3% since January 2020, and had dropped 1.9% from this peak. There are constant headline alarm bells going off about a potential 20% correction in U.S. home prices. Concurrently, equally loud headline alarms ring about homes being unaffordable.
Not many connect these two very simple dots:
– Home prices rose an astonishing 41% during the pandemic.
– The Fed’s inflation fight has slowed housing, and caused prices to drop. This is an intentional part of the inflation fight. Despite alarmist headlines, it would actually be good for buyers, reasonable for sellers, and systemically safe for prices to drop as much as 20%.
Please comment or reach out with your thoughts.
This CoreLogic report has good charts on U.S. and non-U.S. home prices. They explain why non-U.S. prices may be dropping faster.
Check It Out: