The housing market has largely froze because mortgage rates shot several years ago, but recent indicators pointed out the possibility of extended price drop.
The last report on the price of the case with a counter in the house showed 0.3% a monthly decline in the 20 cities index in April, steeper from March to the lower-revised 0.2% stream.
In the written note on Tuesday, Thomas Ryan, North America economists on the capital economy, warned that the fall-back could signal “deeper correction” forward.
“After falling in March, the price of the price in the roads in April sets the risk that prices enter the lasting decline, because the market finally bows mortgage weight near 7%,” he added.
Three month per year, the prices of the house fell by 0.4%, Ryan noted. And while the prices are the year of the working year, it’s the more slowest tempo since August 2023. Years
The counter data is not the only red flag, because the FHF price index has shown a monthly decline of 0.4%.
“It is clear that the existing home market loses the demand because the demand remains anemic due to the costs of non-domestic houses for sale, forcing sellers to adjust their expectations of prices,” Ryan wrote.
Previous data also increases with trend reduction. The medium selling price of the existing home fell into five consecutive months on a seasonally adapted basis. It is as the number of homes available for sale returned around the level before the pandemic.
To be sure, lower prices also make homes more attractive, potentially encourage more demand and Presentation of some relief For younger Americans who want to buy, but they are at the price on the market.
But economists at Citi research marked with liquid covers, attributing the price to decline on high mortgage fees, elevated insecurity, consumer demand and labor market failure.
In addition, the slowdown in the housing sector as a whole is an early sign that the basic demand was weakened this year, Citi said in recent Note.
“While prices were still able to fluctuate monthly, consistent softening in middle sales prices suggests that the trend is likely to continue in the new prices of domestic houses like the counsel,” economists are predicted.
Capital Economics said that there are still some reason to believe that an extended decline can be avoided. Ryan pointed to that supply remains relatively firmly largely, despite some expansion lately.
Meanwhile, the mortgage market is also healthy, reinforced more than a decade of stricter borrowing standards established after a large financial collision. Plus, continued resilience in the labor market should prevent forced sale in the housing market, he added.
“Everything that is said, the weak price data mean that we need to take the prospects for an extended period of price price, which is more serious, which is more that we will consider our upcoming American housing odds,” Ryan said.
