According to a recent LendingTree survey, a sizable portion of Americans believe the once-booming housing market is about to see a significant crash, but some economists believe the pullback needed for a housing recession is already here.
What Happened: Some 41% of Americans, according to a LendingTree survey that was originally reported on by the New York Post, believe that the housing market will collapse within the next 12 months.
Comparatively, only 25% of respondents said they believed the industry would escape a crash, and 34% said they were unsure.
What about the experts?
Housing economists and experts who understand that sections of the U.S. housing market is frothy, have been calling for a reduction in the high home costs that have been dampening demand.
“We firmly believe that we're in a housing recession right now,” Jerry Howard, CEO of the National Association of Home Builders (NAHB), told Yahoo Finance in an interview last week.
Researchers at Morgan Stanley expect the housing market to take a dive in 2023, blowing cold air on those who purchased a home in 2022.The investment bank anticipates a 4% year-over-year gain in U.S. home prices by the end of 2022 as determined by the Case-Shiller Index.
However, given that the Case-Shiller Index rose 8.9% in the first half of 2022, the bank anticipates a 5% decline in U.S. home values in the second half of this year, and a further decline of 10% by 2024.
Lawrence Yun, chief economist for the National Association of Realtors saw signs over the spring, leading into the summer. Saying in August that he thinks housing is already in a recession. “We’re witnessing a housing recession in terms of declining home sales and home building,” Yun said in a note. “It’s not a recession in home prices,” Yun added. “Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”
Jeremy Siegel, Wharton professor of finance expects home prices to slide up to 15% over the next year. “I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside," Siegel told CNBC in an interview, noting that housing prices by any indicator are going down.
Mark Zandi, chief economist at Moody's Analytics assumes a 10% decline in the current market. "Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough," he said in an October tweet. "Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession."
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