The US housing market has experienced a significant drop in value since June 2022, with a total decline of $2.3 trillion, or 4.9%, according to a recent report from real estate brokerage firm Redfin. This marks the biggest drop in percentage terms since the 2008 financial crisis, when home values plunged by 5.8%.
This downturn follows a period of strong growth in the housing market due to the COVID-19 pandemic, where demand was so high and inventory so low, some buyers waived home inspections and appraisals or paid hundreds of thousands over asking price.
The Federal Reserve's interest-rate hike campaign has had an adverse effect on the housing market, with mortgage rates near a record high. This has caused homebuyer demand to dry up and home prices to decrease. The median price of a home sold in January was $383,249, down 11.5% from a peak of $433,133 in May 2022.
However, the total value of US houses is still up 6.5% from the same time one year ago. This suggests that the housing market is not in a severe downturn, and many homeowners will still reap the rewards of the pandemic housing boom.