Housing prices in the United States have fallen slightly by 0.1% in the month of July, according to Zillow, marking the first time in ten years that the prices of homes have fallen. While not a dramatic loss, this dip has led some to believe that the housing market is headed into a recession. Many economists are choosing to see this as a positive, however, making houses more affordable for potential buyers looking to purchase a new home.
A Look at the Housing Market, Statistically
In July, the average price of housing across the United States fell by 0.1%, or about $366, with an average price of $357,107. However, housing prices are still up by 44.5% compared to 2019, prior to the COVID-19 pandemic, with an annual rate of growth of 16% this year. The biggest declines in pricing were seen in San Jose, CA, San Francisco, CA, Phoenix, AZ, and Austin, TX, although the price drops have affected markets across the country.
Fears of a Potential Recession
This dip in the housing market, while minor, has been enough to cause concern among some economists that it could be a sign of a potential recession in the market. This is because the market has been on a general increase since 2012, and there are fears that increased inflation, rising interest rates, and a growing amount of available homes will lead to a major market correction. However, others note that the dip in prices is a bit of welcome relief for potential buyers, who have had to struggle with record high housing prices that have frozen many lower-income home seekers out of the market.
What This Means For Buyers
If you are hoping to purchase a new home, this dip in prices may be good news. The combination of increased housing inventory and declining mortgage rates mean that buyers are in a better position to purchase a new home than they were even a few months ago. For people who may previously have been chased away by high prices and competition over the limited number of available homes, it could be a good time to start looking again at the market.
What This Means For Sellers
This does not mean things are all bad for sellers. The dip in the market, while slight, is not enough to cause a serious depreciation in the value of your home. This means it could still be a good time to sell, especially if you have a new home that you have your eye on. You should be careful not to take too long, however, as this decline in housing prices could be the sign of a greater recession to come in the near future.
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