The U.S. housing market has been pushed into a recession, helped by pandemic-era prices and mortgage rates now surpassing 7%. Expect the 30-year mortgage to remain elevated and some home prices to correct by as much as 20%, economists said.
The U.S. housing market has been pushed into a recession, helped by pandemic-era prices and mortgage rates now surpassing 7%.
With the Case-Shiller index showing the largest month-over-month decline since 2012, on top of falling mortgage applications, these charts suggest “a further weakening in demand,” they added.Mortgage rates will “remain persistently high,” the Wall Street bank said, “causing unsustainable levels of housing affordability to continue weighing on housing demand.”
The last two years of extremely low interest rates were not lost on homeowners who held mortgages — many refinanced. Roughly 90% of mortgages are fixed rate, Goldman noted, with an average note rate of 3.6%. A higher share of people with variable-rate mortgages translates to a higher risk of existing borrowers becoming unable to meet rising payments in the future, Goldman added, as mortgage rates continue upwards.
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These 5 charts show the depth and seriousness of the U.S. housing downturn. Expect a 'further weakening in demand.'The U.S. housing market has been pushed into a recession, helped by pandemic-era prices and mortgage rates now surpassing 7%. Expect the 30-year mortgage to remain elevated and some home prices to correct by as much as 20%, economists said.
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