Home News When to expect the housing market downturn to conclude, according to Wells Fargo

When to expect the housing market downturn to conclude, according to Wells Fargo

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we’ve already seen it.

soon Mortgage rates soar this spring, The US housing market plunged into a housing slumpSaw that housing recession new When existing Home sales are sluggish nationwide.Some markets, such as Seattle and Las Vegas, already have house price correction.

What are the expectations of agents and builders? The U.S. housing market is typically first-in, first-out. First in recession, first out of recession. The big exception is the housing bubble, when the US housing market plunged into recession in 2006. This recession lasted until 2011, three times as long as the Great Recession.

It raises the question: when This ongoing housing recession— Officially launched this summer — What’s the conclusion?

To better understand where the housing market downturn will go next, luck examination Wells Fargo’s latest housing market outlookLet’s see.

of pandemic housing boom It’s been an absolute boon for brokers, builders, and agents: So-called residential GDP jumped 12.8% in 2020. It then rose another 9.9% in 2021.

Going forward, all these increases in activity could be wiped out quickly. wells fargo look. Wells Fargo this year new home sale (-10.5%), Sale of existing homes (-7.4%), detached housing starts (-7.3%), Residential GDP (-10.1%).

Wells Fargo expects the housing market downturn to intensify in 2023.Banks predict further decline next year new home sale (-6.5%), Sale of existing homes (-13.1%), detached housing starts (-12%), Residential GDP (16%).

“The housing adjustment is already well underway…The main driver of the housing market adjustment so far has been the sharp rise in mortgage rates.” A Wells Fargo researcher wrote:We also don’t expect a significant easing in mortgage rates next year. “The very hawkish Fed is one reason why we expect mortgage rates to remain above 6% through Q4 2023.”

Whatever you call it–housing recession, housing correctionAlso housing recession— The downturn in housing is clearly putting downward pressure on house prices. Wells Fargo expects home prices nationwide to fall 5.5% next year. But it varies greatly by market.

“The markets where home prices hit record highs are now disproportionately prone to declines, especially in the formerly hot markets of Mountain West, which saw an influx of remote workers during the outbreak of the pandemic. Notably, relatively tight supplies are more likely to hold up,” write the Wells Fargo researchers.

Wells Fargo predicts that this ongoing housing recession will taper off towards 2024, unlike the six-year housing recession that began in 2006.

“Mortgage rates are likely to fall slightly if the Fed rate cut forecast comes true. [in 2024] Just as lower inflationary pressures boost real income growth. A modest improvement in sales activity will then follow, leading to a resurgence of house price gains into 2024,” wrote Wells Fargo researchers.

Want to stay up to date on the housing recession?Follow me please twitter and @News Lambert.

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