Since earlier in 2022, housing analysts have been going back and forth about the stability of the housing market. In May, Moody’s Analytics chief economist Mark Zandi asserted that the Pandemic Housing Boom had peaked and that we were entering a “housing correction,” which would cause the housing market to work toward equilibrium. Currently, housing activity is declining across the nation and some markets are even seeing falling housing prices.
If this housing correction—which was spurred by a 3 percentage point jump in mortgage rates—had occurred two years ago, far fewer housing markets would've been at risk of home price declines. Back in the second quarter of 2019, just three major regional housing markets were considered significantly "overvalued."
Simply put: In just under three years, the U.S. housing market went from a historically affordable housing market, to a historically unaffordable housing market.