What Is a Housing Market Price Correction?

As a homeowner or would-be homeowner, news of housing market conditions can feel stressful – especially when you haven’t endured those conditions in the past.

But not all terms are as complicated as they may seem, or as scary for you as a homeowner. While a housing price correction or housing market correction describes a drop in home prices, it’s not necessarily bad for homeowners – and can even help homebuyers who are struggling to afford a home purchase.

We’re breaking down the basics of what a housing market price correction is, and whether current housing market activity is indicative of a price correction.

What Is a Housing Market Correction or Price Correction in Real Estate?

A housing market correction occurs when home prices drop slightly. There is no formal threshold of dropping home prices that determines a correction, but a drop of 10% or less is commonly used.

The use of the term “correction” indicates that prices have in some way become unsustainable, so the market is correcting itself to better fit with affordability, demand and supply.

“When we talk about a price correction what we’re really looking at is prices that have been appreciating really aggressively and all of a sudden that slows down rapidly,” says Nicole Bachaud, senior economist at Zillow.

Read the full article here https://realestate.usnews.com/real-estate/articles/what-is-a-housing-market-price-correction