Back in June 2022, Fed Chair Jerome Powell told reporters that spiked mortgage rates would “reset” the “overheated” pandemic housing market.
“I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset,” Powell told reporters last summer. “We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”
Powell later acknowledged in September that “when I say reset, I’m not looking at a particular specific set of data,” while adding, “We probably in the housing market have to go through a correction to get back” to a balanced market, and a “difficult [housing] correction” was already ongoing. In November, he went a step further and said a “housing bubble” had formed during the pandemic and “the housing market will go through the other side of that.”
To some economic onlookers, it sounded like Powell was insinuating that home prices might take a leg down. And for a while, national home prices were on the way down. Between June 2022 and January 2023, U.S. home prices as tracked by the Case-Shiller National Home Price Index fell 5.2% (or down 3% with seasonal adjustment).
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Source: finance.yahoo.com
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