The dollar could crash from 20-year highs if the Fed pauses rate hikes in a weak economy, says top economist
Business InsiderSep 09, 2022
The Facts
According to a new analysis from mortgage data analytics firm Black Knight, the annual rate of US home price appreciation fell from 19.3% to 17.3% in June - the fastest pace on record.
The slowing pace in home values indicates that rising mortgage rates and wider inflation are dampening demand for housing.
The Spin
Narrative A
Since homebuying demand is low right now, it has given industries like homebuilding material suppliers and homebuilders freedom from the overwhelming pandemic-era demand and turbulence that drove up prices. The drop in demand will drop home prices, correcting the market and eventually bringing the US housing market back to normal.
Narrative B
While it might not be equivalent to the 2008 crash, the US housing market is headed toward a significant decline in both home buying and home construction. Anyone who recently bought a house to beat the Fed interest rate hikes will now be sitting at a loss, and home prices will only drop further, essentially depleting the market.
