Some economists predict that by next summer, the total price drop in the US housing market may reach 20%.

(File photo, Bloomberg)

[Financial Channel/Comprehensive Report] Ian Shepherdson, chief economist at Pantheon Macro, an economic research consulting firm, is highly pessimistic about the U.S. housing market. He recently warned that the U.S. housing market is in recession. By next summer, Overall house prices will fall by 20%.

Market Insider reported that Sheppardson and his team estimated that the seasonally adjusted price of existing homes fell 0.7% in August, the third straight month of declines and about 5% below their May peak, despite tight housing supply. But prices are expected to fall further.

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Sheppardson noted that extremely low levels of inventory mean a sudden collapse in housing prices is unlikely, but we still expect a total drop of as much as 20% by the middle of next year.

Sheppardson emphasized that, simply put, the housing market is in a recession, and everything related to housing is either in recession or will soon be in recession.

However, Sheppardson believes that this housing downturn will not collapse the rest of the U.S. economy, leading to a broader crisis, because there is less risk of a market piling up than the housing bubble of the mid-2000s.

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