U.S. home prices are finally falling from a record high notched earlier this year, and could tumble by as much as 20% by mid-2023, according to a top economist.
Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said in an analyst note published this week that home prices have already declined 5% from their May peak. His projections show that seasonally adjusted existing home sales slid 0.7% in August, the third monthly decline.
"The plunging trend in sales has further to go, and prices are falling," Shepherdson wrote in the note.
Painfully high inflation and rising borrowing costs have proven to be a lethal combination for the housing market, forcing potential buyers to pull back on spending. Many experts – including Shepherdson – agree the housing market is now experiencing a recession.