New single family home sales fell for the fourth straight month in April, signaling the end of the housing boom.

The US has officially gone from a housing boom into a “housing correction”, according to Mark Zandi (pictured), chief economist at Moody’s Analytics. In an interview with Fortune magazine, the economist and co-founder of Economy.com said all the evidence pointed to “a rolling over of the housing market” and that it had “peaked”. Zandi’s comments were in response to data which shows the US housing market is cooling down. US census figures said sales of new single‐family houses in April 2022 fell for the fourth month in a row and were 16.6% below the March rate. A new report by real estate brokerage Redfin revealed that almost one in five sellers were now dropping their prices - the fastest rate since October 2019.  The shift is mostly attributed to the relatively high-rate environment, although significantly, inventory has also been increasing steadily since February, according to Federal Reserve data.  The economist, who is also a regular contributor to The Washington Post, used the term "housing correction" to mean that the housing boom would end and give way to a period “where home prices will fall in some regional markets.” He went on to predict that year-over-year home price growth would flatline over the coming 12 months, which would mark the worst period for the sector since 2012. Significantly, he also said that 96% of the country’s biggest housing markets were overvalued “relative to what local incomes can support.”  He predicted that home prices would decline by between 5% and 10% over the coming year but that this could jump to 20% if the US fell into a recession.

Source: Mortgage Professional America