The United States housing market experienced its biggest decline in value since 2008, as the pandemic-fueled surge dissipated. According to Redfin, a real estate brokerage, the total value of US homes dropped by 4.9% or ($2.3 trillion) in the second half of 2022, from its peak of US$47.7 trillion in June.
This was the most significant decline in percentage terms since the 2008 housing crisis, where home values fell by 5.8% from June to December. Homebuyers, who were already dealing with record-high prices, faced further challenges as mortgage rates more than doubled last year. A
s a result, the median US home sale price fell from a high of US$433,133 in May to US$383,249 last month, with fewer bidders in the market.
Nevertheless, according to Chen Zhao, the lead researcher in Redfin’s economics department, the majority of homeowners will still benefit from the pandemic housing boom, as the total value of homes is still around US$13 trillion higher than it was in February 2020. Although there were declines, the housing market remained stable, with the total value of US houses still 6.5% higher than a year earlier in December.
The magnitude of losses for homeowners depended on where they purchased their homes, with pricier cities like San Francisco and New York experiencing the most significant declines, while buyers who moved to pandemic boom towns, particularly in Florida, were still seeing returns on their investments.