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Home prices are beginning to slump across the US, suggesting an ongoing downturn in shares of homebuilders and other real estate firms may just be getting started. With average mortgage rates now surpassing the 6% mark for the first time in more than a decade and sales data looking bleak, the optimism of homebuilders themselves has rolled over significantly in 2022. The latest data regarding residential construction permits represents a collective cratering to two-year lows and prospects for builders could get even worse depending on the FOMC’s latest guidance on monetary policy, set to be released later this afternoon.

Related ETFs: iShares U.S. Home Construction ETF (ITB), SPDR S&P Homebuilders ETF (XHB)

The typical US home’s value fell -0.3% in August from the previous month, according to Zillow. That’s not much, but it is the largest MoM drop since 2011, and likely signals a broader slowdown in the housing market.

Data from John Burns Real Estate Consulting, cited by Fortune, suggests a majority of local markets are already experiencing price declines. Among the 148 major regional housing markets tracked by the real estate consultant, 98 markets (66.2%) have seen home values fall from their 2022 peaks. In 11 markets, the Burns Home Value Index has already dropped by more than -5.0%.

That weakness in price growth can also be exemplified by a significant downturn in the profitability of “flipping” homes. Bloomberg notes that Opendoor Technologies Inc., which is data-driven “iBuying” firm meant to optimize the process of buying homes via cash offers, making repairs and renovations, and then turning them around for sale, appears to have lost money on 42% of its transactions in August, according to research from YipitData. Flipping and iBuying strategies boomed in 2020-2021’s red hot housing market, which coincided with Opendoor’s IPO in June 2020, but is now expected to become a much tougher business. Opendoor’s share price has cratered by more than -76.0% this year.

Stagnation and even decline in home values are already predicted to continue into next year by some on Wall Street. “We expect home price growth to stall completely, averaging 0% in 2023,” Goldman strategist and economist Jan Hatzius wrote in recent a memo to clients. The investment bank cited rising mortgage rates as one of the major drags on housing demand. Freddie Mac data recently pegged the average rate on…

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