Perhaps nothing has been more detrimental to many US consumers – re: homeowners – than the decline in home values.
Redfin reports homeowners have lost $2.3 trillion in value since the June peak.
In particular, the Bay Area housing market has been crushed while Florida continues to trend higher.
Nationally, the 6.5% YoY home price increase in December is the smallest during any month since August 2020.
Maybe Not That Bad
Redfin Economics research lead Chen Zhao said in prepared remarks that the housing market has shed some of its value, but most homeowners will still reap big rewards from the pandemic housing boom.
The total value of U.S. homes remains roughly $13 trillion higher than it was in February 2020, the month before the coronavirus was declared a pandemic, according to Zhao.
“Unfortunately, a lot of people were left behind,” Zhao said. “Many Americans couldn’t afford to buy homes even when mortgage rates hit rock bottom in 2021, which means they missed out on a significant wealth-building opportunity.”
Redfin attributed “waning demand” as a key reason for home price declines and rising mortgage rates—a consequence of the Federal Reserve’s effort to curb inflation—making purchasing a home more expensive.
Suburbs are largely outperforming cities and Florida is benefiting from those moving there from the North and as of recently, the West Coast, one Redfin agent said.