The Sudden Drop in U.S. Housing Prices & Significant Decline in Future Inflation

Published: 22 Aug 2025

Author: Precedence Research

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The U.S. housing market has experienced exponential growth and seeks to aim for the highest share in the coming years based on the progressive reports. The target of the localized shift is somewhere saving the market and has been enhanced over time and development. According to Rosenberg's research, the us housing market will be a potential driver, making headlines in disinflation, with the crucial drop in house prices that will bring down the pace of inflation to nearly 1%. It’s below the Fed’s 2% price growth prediction or target. The firm operated by the popular economist David Rosenberg in 2020 has proof of a huge downturn in the housing sector.

In interaction and discussion with clients, the firm pinpointed its exclusivity housing industry activity index, a change of busy housing into eleven indicators of activity. The index shows the housing areas' situation in its worst downturn era since 2009, during its nightmare times, where the subprime mortgage unfavorable scenarios dragged the economy into a recession. This past concern was mourned by the senior economist of the firm, Robert Embree. He also confirmed that about ten of the eleven indicators mentioned in the index show a prominent drop in the last six-month period.

Top drops in the U.S. housing prices in the activity recorded in the index

The housing indicator showed a decline of 23.9% in the index result and around 23.7% decline rate of new single-family homes sold. The existing homes (sold) came down to 16.1% and 14.2%, respectively, over the last two quarters in the quarterly new tenant rent index. The potential buyer traffic price dropped by 7 points. This is the most crucial data point built into the index by far, claimed Embree. Except one indicator that hasn’t contracted yet in the last six months is home prices. The Case-Shiller 20-city composite home price index, that have tracked house prices in 20 crucial metropolitan areas, is around 0.8% over the last half year.

Embree adds, “Though the lessened activity will possibly weigh on prices as sellers will have to lower the prices to engage buyers back in the market. o the basis of a six-month timeframe, the Case-Shiller composite is near entering a negative limelight.” 

This will experience a big drop in inflation in the future, as a few economists are stressed over the tariffs that might stoke elevated prices for customers.