Housing experts are sounding the alarms of a possible recession within the next year, which some say could cause U.S. home prices to fall another 20% by next summer. Seasonally adjusted existing-home prices dropped by 0.7% in August, marking the third consecutive monthly decline, Insider reports. Home prices are now 5% below their May peak, and as supply continues to plummet nationwide, those regional prices will likely fall even further.
Though the U.S. housing market is rattled by far fewer risks than the mid-2000s housing bubble, record inflation poses extended challenges for market players after surging to a 40-year high in June.
“The plunging trend in sales has further to go, and prices are falling,” Ian Shepherdson, the chief economist of Pantheon Macroeconomics, said in a research note published on Wednesday.
“The very low level of inventory means that a headlong collapse in prices is unlikely, but we still expect a total decline of up to 20% by the middle of next year,” the economists wrote.
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