Three Reasons Why Home Prices Could Fall 50% In 2023 – This Will Affect Everyone, Lost Decade Ahead?

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Home Prices Could Fall 50% In 2023 – This Will Affect Everyone, Lost Decade Ahead?
Gear up yourself for a housing market crash in the new year. A pandemic-induced property boom peaked at the end of 2021 and the sector is now braced for the broadest slowdown since the financial crash. Surprisingly, the mainstream media is holding back the issue and is neglecting the fact that how the high prices have pushed a lot of buyers out of the market. Now thathome prices have surged around 50% since 2020, and mortgage rates have more than doubled, a lot of big names in the financial world have been warning that the housing bubble to burst in the new year. These experts are convinced that aggressive rate hikes on the part of the Federal Reserve will cause consumer spending to decline dramatically, thereby leading to a broad economic downturn and spurring a wave of unemployment. According to experts, there would be more pain as compared to the subprime housing crash of 2008 and home prices could fall by 50% at least.
There are many drivers behind this catastrophe, but for the moment, we’ll discuss major drivers that are elevated right now and are enough to justify this alarming situation. Let’s dive into these drivers one by one.
Number 1:
The global sell-off in stock markets is one of the many factors that makes it clear that the housing market crash is around the corner. You must be wondering what does stock market has to do with the housing market. Well, we all are aware of the demographic issues in the USA. Baby boomers are reaching their age of retirement. The majority of their wealth is in their stock portfolio and their home equity. Moreover, their bond portfolio has been crushed equally. At the same time purchasing power of the baby boomers has been squeezed in several different ways. For instance, inflation. Inflation is going up from 9% to 10%. CPI has given these figures. We all know that CPI never gives us accurate prices. We all know that over the last year, prices have risen by at least 8%. Baby boomers are feeling the effects the most. The incentives that the government gave such as mortgage breaks or direct checks; are either coming to an end or have gone already. This will create more pressure on the baby boomers who are retiring at the moment.

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