- Real estate prices are falling as homebuyer demand fades.
- Some people worry their home will lose value, leaving them holding a mortgage worth more than their property.
$4 are $4 in pockets of the country. It's caused some people to wonder if this economic downturn will look anything like the $4 and leave them holding a mortgage that's worth more than their house.
That's because the US $4 has come to a $4 as inflation and interest rate hikes price out many would-be buyers.
Although total homeowner equity in the US now stands at $4, and tappable equity — the amount of cash available for homeowners to access while retaining at least 20% equity in their homes — has $4 to $11.5 trillion, growth is moderating.
Indeed, the $4 is escalating nationwide. With less people competing for homes, the share of sellers $4 has hit an $4. Additionally, the portion of homes selling above list price has fallen for the first time since June 2020.
Daryl Fairweather, the chief economist at Redfin says homeowners shouldn't be too worried.
"The value may fall in the near term, but if you plan to live there for five or 10 years you will almost certainly gain home equity over that horizon," she said in a $4.
That's because home prices are still rising "albeit, acceleration is moving at a slower pace," Mike Schwartz, a broker and housing analyst with brokerage firm The Agency, told Insider.
"Although prices are falling in the month-over-month category, we are still seeing growth year-over-year," he said. "So homeowners who have owned for over a year are still sitting on solid equity growth."
While some homeowners have also lost value in their investments, Schwartz says they are unlikely to go underwater as long as demand outpaces supply in their housing markets.
"A market slowdown does not guarantee prices will fall across the board - the slowest period we have on record was the initial few months of the pandemic and prices did not fall because supply and demand were still in balance," he said. "It's when supply outpaces demand that prices fall and right now we still have a market where demand is outpacing supply.
Unlike the $4, there are not enough homes to keep up with housing demand — even as fewer buyers pursue homeownership. $4 from Realtor.com shows that US homebuilders need to construct an additional 5.8 million homes to meet demand — which is why US home prices have yet to plummet like they did in 2008 when a wave of foreclosures caused a flood of available homes on the market.
"A demand drop-off will not pull prices down unless supply grows enough to the point where the inventory supply tips the scale to a buyers market," Schwartz said. "With supply of single-family homes growing at a smaller pace than gold, I personally believe the supply and demand intersection continues to favor the decision to buy."
On the other hand, Schwartz says house flippers — investors who purchase homes and typically flip them within a year for a greater profit — "might be in a tougher spot at the moment."
Investors were responsible for 9.6% of all homes sold in the first quarter of 2022, but while their home sales soared to a 22 year-high, their profit margins declined to a 13-year low.