Home News Prepare yourself: ‘The U.S. housing market is at the beginning stages of the most significant contraction in activity since 2006’

Prepare yourself: ‘The U.S. housing market is at the beginning stages of the most significant contraction in activity since 2006’

by admin
0 comment

“”“I don’t think home sales will stop altogether. They will just be late. People can still sell homes, but it may take just a little longer than it was. ..


— Ren Kafer, Deputy Chief Economist at Freddie Mac

According to one economist, the US housing sector is in the midst of the biggest slowdown in more than a decade. But don’t expect prices to fall to Earth yet.

Renkafer, Deputy Chief Economist at Freddie Mac, said:
FMCC,
-1.82%
,
Tweet..

“Although not yet visible in many data series, it shows that mortgage applications will decline significantly over the summer,” he explained. He said homebuying mortgage applications have fallen by 40% from the latest peak in 2021.

The purchase and refinancing application is actually The lowest level in 22 years.

Applying for a mortgage as a data point “knows where the market is heading,” Keifer said in an interview with MarketWatch. “This is because people are in the early stages of buying a home, and as the volume of applications decreases, it takes a month, a month and a half, and the composition of mortgages for mortgages also decreases. Tends to show. “

Kafer expects home sales to be “quite slow during the summer.”

in the meantime, Freddie Mac data released Thursday morning It was revealed that interest rates on mortgages are rising against the backdrop of rising interest rates and inflation.

To be clear, “I don’t think home sales will stop altogether,” Keifer emphasized. “They will just be late. People can still sell their homes, but it may take just a little longer than what it was.”

Will the price go down as a result of the “contract”?

Some may jump to the conclusion that weak data represents the possibility of falling home prices, Otherwise the expert will warn you.

“Does this mean house prices plummet? I don’t think so,” Keefer said.

According to a Freddie Mac study, rising interest rates increase the composition of home sales and mortgages, but not necessarily lower home prices. Also rise. “They tend to be sticky,” Keifer said.

“And growth tends to slow, but not slow,” he added.

Write to: [email protected]

You may also like