Home prices in August were down about 6% from their peak in June, the biggest 2-month drop in prices in nearly a decade. The pace of home sales slowed for the 7th straight month, NPR.org. "The housing market certainly reacts to the monetary policy change," says Lawrence Yun, the chief economist for the National Association of Realtors which just released the new existing home sales numbers. The Federal Reserve has been raising interest rates to fight inflation. Mortgage rates anticipate future moves by the fed and bond markets more broadly, so they rose very sharply earlier this year — from around 3% to up above 6%. Just about all economists agree that this is not a housing crash and that this situation is different than in 2008, when the bottom fell out of the housing market. Right now, the nation is in the midst of a severe housing shortage. For a decade following the 2008 crash, builders didn't build enough homes. Today homes are still getting snapped up by buyers and put under-agreement in near-record time — just 16 days on average.
