Recently, news has emerged from several states in the United States that they will prohibit Chinese buyers from purchasing real estate.

However, in fact, investors from China are withdrawing from this market at an even faster pace, and selling off U.S. real estate has become a consensus among many overseas buyers.

In the view of many professional investors, a U.S. real estate crisis is imminent.

01, Already Down by $2.3 Trillion

Since the middle of last year, U.S. housing prices have been on a continuous decline. Although the current drop does not seem too significant, the downward trend has not stopped. With the Federal Reserve's continuous interest rate hikes and the constant increase in U.S. Treasury yields, mortgage interest rates have been rising, potentially increasing the risk of a significant drop in U.S. housing prices in the future.

A renowned U.S. real estate brokerage website provided such data: at the end of June last year, the total value of houses in the United States was $47.7 trillion, setting a historical high at that time. However, by the end of last year, this figure had dropped to $45.3 trillion.

In just half a year, the total housing price fell by $2.3 trillion.

But what is more concerning now is that the remaining $45 trillion in housing assets could potentially experience an even larger decline.

02, Chinese Buyers Selling Off

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After the Federal Reserve's continuous interest rate hikes, the U.S. stock market has taken a significant dip, but fortunately for the average American family, housing prices seem to have been largely unaffected.Last March, the Federal Reserve raised interest rates for the first time, yet the U.S. housing index rose by more than 20% year-on-year, recording the highest increase in thirty-five years. However, looking back now, it is not that real estate prices can completely detach from economic laws; it is just that the transmission of interest rate hikes to the real estate sector requires a certain amount of time.

The relevant data indicates that by the end of January this year, the median house price in San Francisco fell by 8% compared to the previous month, by 11% compared to the same period last year, and by 35% compared to the peak in March last year.

The peak median house price across the United States occurred in May last year, but by January of this year, this figure also dropped from $433,000 to $383,000, a decline of 11.5%.

No wonder some real estate brokers in the United States pointed out that when some state governments proposed to ban Chinese buyers from entering the market, it was nothing more than a hope that property holders would cherish their assets and not sell them off easily, so as not to be unable to repurchase in the future.

However, using this method obviously cannot prevent Chinese buyers from selling, especially after the Federal Reserve raised interest rates in March last year, the speed of selling has become even faster.

03, the impact of U.S. Treasury bond declines on real estate

The fundamental reason for the continuous decline in U.S. housing prices over the past six months lies in the Federal Reserve's continuous interest rate hikes, leading to a constant rise in interest rates.

Mortgage interest rates are not completely synchronized with the Federal Reserve's interest rate hikes, nor are they completely synchronized with the federal benchmark interest rates. However, upon careful observation, we find that the correlation between the rise and fall of mortgage interest rates and the yield of U.S. 10-year Treasury bonds is very high.

Starting from November last year, the yield on U.S. 10-year Treasury bonds has fallen, and at the same time, the 30-year mortgage rate has dropped from over 7% to 6.3%.Just as the industry was breathing a sigh of relief, before they had a chance to see the rebound in housing sales data, they discovered that in the last few days, there has been a massive sell-off in the U.S. Treasury bond market, with prices plummeting wildly.

Last night, the yield on the 10-year U.S. Treasury note once again broke through 4%.

Goldman Sachs' latest report predicts that if lending rates exceed 6.5%, housing prices will fall by more than 6%. However, if lending rates exceed 7%, housing prices will drop by 10%.

Data provided by a well-known personal finance website in the United States shows that by the end of last year, the average debt per American household was about $143,000, with the total national debt reaching $17 trillion, most of which is mortgage loans.

Once interest rates continue to rise, the pressure of repaying loans will increase, and some families may choose to sell their homes at a lower price to repay their loans, which will cause a chain reaction in the real estate sector.

At that time, the current $45 trillion in real estate could rapidly depreciate, and this wave of property crisis could far exceed the subprime crisis of 2008.