Housing market in USA right now

srinivasan sankar
2 min readSep 26, 2022


Something's got to give in this housing market.

Affordability has fallen off a cliff and housing prices have not yet fully moved to reflect this.

Housing market in a nutshell:

If you secured a 30-year fixed mortgage on a $600,000 home at a 2.6% interest rate in 2021, you have the same monthly mortgage payment as someone that just bought a $392,000 home at today’s 6.2% interest rate.

Sellers don’t want to sell because: a) They would record a loss (~20–25%) if measured from Feb 2022 highs, and b) They’ve locked in such a low fixed rate that purchasing a new home at the current, higher fixed rate would be extremely unaffordable.

Buyers aren’t buying because: a) There isn’t much inventory due to the above, and b) They can’t qualify for a mortgage at the higher rates, and if they can, again — it will be highly unaffordable.

“There was a big imbalance … housing prices were going up at an unsustainably fast level. For the longer term what we need is supply and demand to get better aligned so housing prices go up at a reasonable level, at a reasonable pace and people can afford houses again. We probably in the housing market have to go through a correction to get back to that place.” — Jerome Powell

Falling housing market is great for those looking to “trade up” in the market: buying newer, bigger houses as the absolute dollar trade works in their figure. BUT if this transaction is not 100% cash, affordability is still getting crushed by the interest rate move even for these buyers.

Across the board, there will be more blood in the housing market.

As demand fades, the housing market could be bracing for a crash or correction.

Some Gen Zers are hoping for a housing market crash so they can afford to buy a home 🤷🏻‍♀️ 🤷🏼



srinivasan sankar

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