U.S. Housing Market Sees Record Drop in Value and Investor Purchases in 2022
It’s been a tumultuous year for the U.S. housing market. According to a report from real estate brokerage firm Redfin, the total value of U.S. homes tumbled from a record high of $47.7 trillion in June 2022 to $45.3 trillion at the end of the year — a decline of $2.3 trillion, or 4.9%. This marks the largest June-to-December drop in percentage terms since 2008’s housing crisis, when home values slumped by 5.8%.
Rising mortgage rates have made buying a home more costly, which is one of the primary causes of the decrease in homebuyer demand. In December, the average 30-year fixed mortgage rate was 6.36%, a figure that has doubled since the beginning of 2022. Rates dropped in the early part of February, but have since risen back to their December state.
In the fourth quarter, year-over-year purchases of single-family homes by investors dropped a record-setting 49.8%, exceeding any other type of property. Purchases of condos/co-ops by investors dropped 35.6% while acquisitions of townhouses and multi-family properties both decreased by 31.1%.
Roughly one-third (31.2%) of home purchases were paid for with all cash in December, according to a new report from Redfin. The percentage had risen from 28.8% in the previous year, yet it was lower than the peak of 31.9% observed in November, the highest in
A report revealed that in 56% of Opportunity Zones in the U.S., the median prices of single-family homes and condos decreased from the third to the fourth quarter of 2022, and decreased by at least 5% in nearly half of these zones. Declines in the zones closely matched those in other neighborhoods as home prices dropped throughout the US during the latter half of 2022, following a decade of steady expansion.
The total value of homes in Miami increased by 19.7% to $468.5 billion in December compared to the previous year ($77 billion), making it the metro area with the greatest annual increase in percentage terms according to Redfin analysis. In December, Miami's housing market was valued at approximately $472 billion, which was the same as when it reached its highest point in July.
0. “US housing market sees $2.3T drop in value, biggest since 2008” Fox Business, 23 Feb. 2023, https://www.foxbusiness.com/economy/us-housing-market-sees-drop-value-biggest-2008
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