US home prices could plunge 20% as risk of ‘global housing slide’ looms: Dallas Fed

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US home prices could plunge 20% as risk of ‘global housing slide’ looms: Dallas Fed
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Dallas Fed researchers warned of brewing trouble in the US and German housing markets.

US home prices could plunge by nearly 20% as erratic market activity and rising interest rates drive a “risk of a deep global housing slide,” the Federal Reserve’s own researchers said in a report Tuesday.

The researchers noted “exponential growth in key housing market indicators,” such as home-price-to-rent ratio and real house prices, signs of an affordability crisis.US home prices would need a 19.5% correction “to bring the US in line with its fundamentals,” researchers Lauren Black and Enrique Martinez-Garcia

Rising interest mortgage rates have triggered a significant slowdown in the US housing market over the last year. Existing-home sales have declined for 12 straight months, according to the National Association of Realtors.

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