At the start of the year, the housing market showed no signs of slowing after two years of persistent price hikes and steady demand, but halfway through 2022, experts say that homebuying boom is giving way to a housing recession. Existing home sales fell by 5.9% from June to July and were down more than 20% year-over-year, CNBC reports.
As interest rates continue to surge well beyond 5%, a growing number of buyers are canceling contracts and waiting for affordability to improve, but prices are still rising across the country while inventory remains tight.
“We’re witnessing a housing recession in terms of declining home sales and home building,” Lawrence Yun, chief economist for the National Association of Realtors, said in a recent report.
At this point, however, it’s a different story for homeowners, buyers and sellers.
“It’s not a recession in home prices,” Yun added. “Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”
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