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US Housing Market Ends Decade-Long Streak of Year-Over-Year Price Increases

    The US housing market experienced a significant shift in February 2023 as the median price of existing homes decreased from the previous year, marking the end of more than a decade of consecutive year-over-year price increases, according to a report released by the National Association of Realtors (NAR) on March 21, 2023.

    The median price of existing homes in the US in February was $363,000, a 0.2% decline from the previous year, with the West and Northeast experiencing the largest price drops of 5.6% and 4.5%, respectively. However, the Midwest and South continued to see modest price increases of 5% and 2.7%, respectively.

    Lawrence Yun, the chief economist for NAR, noted that this is not the bottom for prices, and he expects a continuing price correction. While he predicts a 2% decline in prices this year, he also notes that there is a possibility for either a 5% decline or increase.

    Despite the drop in prices, February 2023 saw a surge in home sales, with existing home sales rising by 14.5% from January, the largest monthly percentage increase since July 2020. This reversal in sales ended the longest streak of month-to-month declining home sales on record.

    However, sales were still down 22.6% from the previous year, largely due to the steep increase in mortgage rates over the past year. Although mortgage rates remain volatile, the drop in prices in some areas has led to stronger sales gains, particularly in regions where local economies are adding jobs.

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