Don't Expect Home Prices to Come Crashing Down Anytime Soon

The US housing market is suffering as a result of rising mortgage rates. However, investors looking for a price decline are unlikely to get a reprieve any time soon.

What's happening: According to the S&P CoreLogic Case-Shiller Indices, home prices increased 18% in June compared to the same month last year, with Tampa, Miami, and Dallas recording the largest yearly rises.

Compared to May, when they increased 19.9% annually, this was a slower rate. The fact remains, nevertheless, that prices are still rising significantly even as home sales have decreased from their heights.

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This identical issue was looked at earlier this year by economists at the Federal Reserve Bank of Dallas, who noted in a blog post that property prices were rising faster than market forces would suggest they should and were "unhinged from fundamentals."

Observe this space As the Fed's measures to limit inflation take hold, the market is changing. The cost of purchasing a home is increasing as a result of rising mortgage rates. Theoretically, this should eventually reduce demand and prices.

That affects more people than just buyers and dealers. The housing market is a key economic indicator and a reflection of how the Federal Reserve's interest rate increases are faring.

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