House Prices Keep Declining

Jonathan Garner
2 min readNov 30, 2022
Source:https://fred.stlouisfed.org/series/CSUSHPINSA#
Source:https://fred.stlouisfed.org/series/CSUSHPINSA#

I’ve talked about the obvious, inevitable decline in house prices. Yet, there can be no doubt that this subject is not merely theoretical because prices keep (actually) declining; therefore, this is not science fiction.

Previously, I looked at things like mortgage rates and the Fed’s holdings — or (now) lack thereof — of mortgage-backed securities. Data like that provides a causal link to reliably predict what will happen in the future. Now, we are seeing the fruits of my predictions in current housing prices, see below.

Source:https://fred.stlouisfed.org/series/CSUSHPINSA#

Could the trend reverse? Yes, but the simplest explanation is that the decline will continue; the housing bubble is officially over: the crash is here. How far will housing prices collapse? Nobody knows for sure, but it will not surprise me if housing prices revert back to where they were in February 2020.

Regarding more forward-looking indicators, the Fed’s holding of mortgage-backed securities will continue to go down for a while: it’s only really just now started. With regards to mortgage rates, I expect rates to soon get above the consumer price index (CPI).

Keep in mind that, so far, I’ve only been talking about general prices in the United States. Once you look under the hood at more specific locations, things look worse — way worse. For example, Los Angeles is declining at a much faster rate than the national average.

Source:https://fred.stlouisfed.org/series/LXXRSA#

Los Angeles isn’t just an anomaly either. For instance, if you look at house prices in San Diego, you will see the same thing.

Source:https://fred.stlouisfed.org/series/SDXRSA#

If you work a job related to the housing sector, I don’t know what to tell you. You’re freaking screwed, dude. All jokes aside, things aren’t looking good.

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Jonathan Garner

Finance/Investing/Economics/Philosophy/Religion blogger. I’m also a Philosophy of Religion blogger:https://jonathandavidgarner.wordpress.com/