The story is here:
From the fourth quarter of 2020 to the fourth quarter of 2022, the U.S. housing market experienced one of the most significant increases in housing prices in American history. Data provided by the Federal Reserve Bank of St. Louis show that over that two-year period, the average sales price of a home skyrocketed more than 36 percent, from $403,900 to a whopping $552,600.
For the first time in history, the 12-month increase in home prices
topped 15 percent for seven quarters in a row, beginning in the second quarter of 2021.Many current homeowners celebrated the unprecedented rise in housingvalues, but those rapid increases came with an important caveat:whenever housing prices increase as quickly as they have in recent years, an economic, stock market, and/or housing crash is almost certain to follow.
The evidence on this point is well established. In the 1970s, late
1980s, and in the early to mid-2000s, there were similarly large,sustained growths in housing prices. In every case, a large recession followed. And although the rule doesn’t always apply perfectly, it tends to be that the bigger the increase in housing prices is, the harder the
economy falls.
So, the bottom line is this is going to come out exactly the way I repeatedly said it would.
Now, they’re going to be doing some really strange things over the next several months trying to keep this sinking ship a float long enough to get it past election day. But, those tactics will in fact cause their own problems.
Personally I find it ironic that the largest part of the people complaining about housing costs are Biden supporters.
