Home prices across the US are posting biggest monthly declines since 2009

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US house prices show their biggest monthly declines since 2009: median price falls twice in two months as the market loses momentum with skyrocketing mortgage rates – pushing affordability to its LOWEST level since the 1980s

  • Median home prices fell 0.98 percent in August, after falling 1.05 percent in July, the largest two-month drop since January 2009
  • Rising mortgage rates have pushed affordability to levels not seen since the 1980s – with some payment income ratios reaching over 72 percent
  • Rates for a 30-year mortgage have reached 6.29 percent – the highest since 2008

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Home prices continue to fall across the US as median home prices continue their two-month decline, reaching a number not seen since 2009.

Median home prices fell 0.98 percent in August, after falling 1.05 percent in July, according to Black Knight Inc. These are the largest monthly declines since January 2009.

San Jose saw the sharpest drop of 13 percent ($203,000) from its 2022 peak, followed by San Francisco at 10.8 percent ($137,000) and Seattle at 9.9 percent ($82,500).

A “historically low stock” complemented by rising mortgage rates — which have since reached 6.29 percent, the highest since 2008 — have driven real estate sellers away from the market, Black Knight said in a release.

The 30-year average mortgage rate has reached 6.29 percent - the highest since 2008

The 30-year average mortgage rate has reached 6.29 percent – the highest since 2008

Median house prices fell by an average of 0.98 percent in August, after falling 1.05 percent in July.  This is the biggest drop in two months since 2009

Median house prices fell by an average of 0.98 percent in August, after falling 1.05 percent in July.  This is the biggest drop in two months since 2009

Median house prices fell by an average of 0.98 percent in August, after falling 1.05 percent in July. This is the biggest drop in two months since 2009

In a ratio of median income to median monthly mortgage payments, some homeowners have to pay twice the median income to buy a home at an average price

In a ratio of median income to median monthly mortgage payments, some homeowners have to pay twice the median income to buy a home at an average price

In a ratio of median income to median monthly mortgage payments, some homeowners have to pay twice the median income to buy a home at an average price

Average inventory had risen between May and July, but started to decline in August.

The decline in median prices comes at the back of the continued growth of the past two years.

“Together, they represent two consecutive months of significant decline after more than two years of record growth,” said Ben Graboske, president of Black Knight Data and Analytics.

In addition to rising mortgage rates, buying a home at the median income in some US cities is no longer a viable option for potential real estate buyers.

According to Black Knight’s “Mortgage Monitor” reports, 71 of the 100 largest markets in the US are at a three-decade low in terms of home affordability.

In some cities, such as Las Vegas, Miami, Los Angeles, and Phoenix, it takes more than twice the average income to buy a home at an average price.

Los Angeles has the worst payments-to-income ratio in the US at 72.1 percent — or monthly mortgage payments as a ratio to monthly income.

Between 1995 and 2003, the average was 35.5 percent, leading to a difference of more than 36 percent.

A US home affordability index shows percentages not seen since the 1980s

A US home affordability index shows percentages not seen since the 1980s

A US home affordability index shows percentages not seen since the 1980s

In some cities, such as Las Vegas, Miami, Los Angeles, and Phoenix, it takes more than twice the average income to buy a home at an average price

In some cities, such as Las Vegas, Miami, Los Angeles, and Phoenix, it takes more than twice the average income to buy a home at an average price

In some cities, such as Las Vegas, Miami, Los Angeles, and Phoenix, it takes more than twice the average income to buy a home at an average price

Some financial analysts predict house prices will continue to fall, and some predict a 5 to 15 percent decline by 2024.

In August, Fitch Ratings said housing activity could fall by “about 30 percent or more over a period of several years, and 10 to 15 percent declines in house prices.”

Fortune complemented this sentiment, although adding that some markets could experience a 20 to 25 percent drop.

Goldman Sachs, which previously predicted prices would rise 1.8 percent in 2023, now expects prices to fall between 5 and 10 percent.

“We consider the risks of these estimates to be on the downside due to a sharp deterioration in our descriptive home price outlook scores and evidence of a strong inversion in regional data,” Goldman Sachs researchers. wrote.