Surging Mortgage Rates Could Drive Home Prices Down 20 Percent: Dallas Fed
Surging mortgage rates are now threatening to drive U.S. home prices down as much as 20 percent, according to a new study.
Many prospective buyers have been pushed out of the market due to rising home prices and higher mortgage rates.
The sharp rise in mortgage rates this year “boost the odds of a severe house price correction,” as the cost to purchase a home reaches its peak, according to research from the Federal Reserve Bank of Dallas, released on Nov. 15.
The analysis, conducted by Dallas Fed economist Enrique Martinez-Garcia, said that housing prices after adjusting for inflation have risen since the start of the pandemic to their highest level since the 1970s….