Median home prices in the United States fell 0.98 percent in August after falling 1.05 percent the month before, marking the largest monthly declines since the collapse of the 2000s U.S. housing bubble.
The declines in home prices, according to a Monday report from mortgage data monitor Black Knight, Inc., are among the most dramatic in U.S. history. The last time prices fell farther in a single month, according to Black Knight, was in January 2009, when the United States had just entered the Great Recession amid the collapse of home prices caused by high-risk subprime mortgage lending.
According to Black Knight, the falling prices in recent months are due to lower demand and a lack of enthusiasm among buyers as interest rates have risen. With high interest rates, homeowners are also more reluctant to put their property on the market for fear of letting go of their generous rates. Home prices are falling after a years-long period of dramatic inflation in prices, in which homes saw "a decade’s worth of appreciation in just two-and-a-half years," Black Knight reports.
Even with home prices in decline, "housing remains historically unaffordable," Black Knight said, at its worst point in 38 years. The monthly principal and interest payment on the median home is up $930—73 percent—since last year.
Americans are overwhelmingly pessimistic about the U.S. economy as they face down a historically bleak housing market along with high levels of inflation and declining economic growth. According to the latest Gallup polling, half of Americans rate current economic conditions as poor, while only 16 percent rate them as excellent or good. Seventy-two percent predicted the economy is going to get worse.