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IPFS News Link • Housing

Without Easy Money from the Fed, Home Prices Will Keep Falling

• Ryan McMaken - Mises

Home prices continued to slide in August as the economy cooled, and as the Fed hit the Pause button on quantitative easing while allowing interest rates to rise. Home prices in August were 13.0 percent higher nationally compared with August 2021, according to newly released data from the S&P CoreLogic Case-Shiller Home Price Index. That is down from a 15.6 percent annual gain in the previous month. This is a big shift downward, and as CNBC reported Tuesday, "The 2.6% difference in those monthly comparisons is the largest in the history of the index, which was launched in 1987, meaning price gains are decelerating at a record pace." The new trend was further described by a Case-Shiller spokesman as "forceful deceleration in U.S. housing prices … [while] price gains decelerated in every one" of the twenty cities measured by the survey. Every city in the index saw a larger year-over-year decline in August than in July. (In the seasonally adjusted numbers, the month-over-month decline was the largest since 2009.)