As of August this year, U.S. home prices have fallen for seven consecutive months, the longest since 2007, and high interest rates on loans continue to cool demand for home purchases.

According to economists predict that future housing transactions will continue to decline.

For the first time since the recession in 2008, mortgage rates exceeded 6%. Many first-time homebuyers or prospective homebuyers were scared off by interest rates, and homeowners had to choose to continue to hold their properties rather than take the opportunity to sell at a higher price.

After a quarterly adjustment, U.S. secondary home sales reached 4.8 million units in August, down 0.4 percent from July. The overall volume of transactions fell 19.9 percent last year, the lowest level since May 2020.

On Sept. 21, the Federal Reserve approved a 0.75 percentage point increase in the benchmark federal funds rate. The move resulted in higher mortgage rates, leaving homebuyers paying more than $100 a month on their mortgages and discouraging many people who need to buy a home.

In general, 30-year mortgage rates are the most popular among homebuyers, accounting for more than 90 percent of all home loan applications.

As of Sept. 15, the average 30-year fixed mortgage rate was 6.02 percent, up from 2.86 percent a year earlier. Thus, if a person buys a $400,000 home, the monthly loan payment will now be $700 higher than it was in January.

Driven by the epidemic, the U.S. real estate market is very hot in mid-2020. Being isolated in their homes for long periods of time and having little original space, people are more inclined to trade up to a larger home. The big real estate agents started a price war and good houses were often snapped up within a few days.

Since purchase contracts are usually signed a month or two in advance, the August figures largely reflect the purchases made in May and June. Therefore, it can be predicted that the recent increase in mortgage rates will affect home sales this month and next.

Mortgage rates rose to 5.81% in June and home prices fell for two consecutive months after reaching a record $413,800 in June.

In August, the average U.S. home price stabilized at $389,500, up 7.7 percent from last year.

Recently, price growth in the U.S. housing market has been slow due to increasing mortgage rates and weakening housing demand. However, home prices remain higher than a year ago and the number of homes for sale remains below normal levels.

Driven by high home prices and high interest rates, the purchasing power of U.S. houses is at an all-time low. Consumer confidence in the housing market has fallen to its lowest point since 2011.

As long as home prices continue to fluctuate, the U.S. housing market will remain depressed.

Not only has the real estate market been affected, but the surrounding economy related to real estate has also shown a downward trend. For example, household appliances, furniture and building materials.

With fewer new homes being built, the construction rate of single-family homes fell 18.5% in July compared to the same month last year.

New housing construction accounted for 10% of total real estate sales, but supply chain shortages caused by the epidemic led to higher building material prices, increased labor costs, and higher construction costs. The rising cost of new home construction has reduced its transaction rate.

On average, every house sold provides two jobs, such as lawyers or real estate agents. So for every 1,000 houses sold, about 2,000 jobs can be generated.

If the U.S. real estate market remains depressed, then there will be layoffs in the real estate market and a corresponding rise in the U.S. unemployment rate.

For people who have already bought a home, higher mortgage rates will reduce their spending in other areas.

In a tight economy, people's consumer demand is repeatedly reduced and economic growth is in trouble.

In addition, homebuyers who are dissuaded by high mortgage rates have to continue to rent.

As a result, a large number of people in need of rental housing are flooding the rental market, and rents are rising significantly as demand increases.