The U.S. housing market is going to face a price correction “worse than 2008,” according to housing analyst Melody Wright, who expects home prices to drop in half as soon as next year.
“I think…we’re going to correct all the way to a point where household median income matches the home price, the median home price. And so that is going to be worse than 2008. This could devolve a lot faster than last time,” Wright said during an interview with Adam Taggart, host of Thoughtful Money, published on YouTube.
What Is Happening in the Housing Market?
Rising inventory and dwindling demand have brought down home prices in many U.S. metropolitan areas this year, especially in those markets in the Sunbelt and the South which became overheated between 2020 and 2022.
At the national level, the vertiginous price growth that characterized the pandemic years has also slowed to a grind, with the median sale price of a home in October only 1.2 percent higher than a year ago, according to Redfin, at $439,701.
According to a new report from Zillow, 53 percent of all U.S. homes lost value over the past 12 months—the most since 2012.
While affordability has slightly improved, however, millions of Americans are still being kept on the sidelines of the housing market by higher home prices, property taxes, and home insurance premiums, as well as still-elevated borrowing costs.