Property sales in the USA have taken a big fall, with affordability being at its worst level since 1985, and house price alling since June. Experts have predicted however, that Britain will be hit harder than the states.
Mortgage rates have hit a 20-year high of 7 per cent, much higher than in the UK.
Transactions in the UK are currently stable and price declines are still to show up in the official index.
Capital Economics, a research consultancy, has forecast an 8 per cent house price fall in America.
Meanwhile, in the UK a drop of 12 per cent could be recorded.
Even in Florida, which in the year to June 2022 recorded the highest house price growth of any state in America, demand is dropping.
Prices soared by 27 per cent, largely driven by an influx of relocators from California, Chicago and New York – areas with higher taxes and stricter Covid policies.
At the current time, prices are flat year-on-year.
Mick Duchon, of Corcoran real estate agents in Miami Beach, said: “I’m seeing buyers expect more negotiability and sellers are more flexible because they know what’s happening in the market.”
America’s housing downturn is ahead of the UK’s, where official data shows month-on-month house prices in September were still level.
Nationwide building society’s more timely index, which is based on mortgage approvals, showed that monthly falls began in October.
Even though mortgage rates are lower in Britain, the impact here will be greater.
American homes are the most unaffordable they have been since February 1985.