{"id":522808,"date":"2022-12-07T14:00:00","date_gmt":"2022-12-07T11:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/economists-a-us-housing-recession-has-already-arrived\/"},"modified":"2022-12-07T14:00:00","modified_gmt":"2022-12-07T11:00:00","slug":"economists-a-us-housing-recession-has-already-arrived","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/economists-a-us-housing-recession-has-already-arrived\/","title":{"rendered":"#Economists: A US housing recession has already arrived"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a4cf65b1ad60\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a4cf65b1ad60\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/economists-a-us-housing-recession-has-already-arrived\/#Economists_A_US_housing_recession_has_already_arrived\" >Economists: A US housing recession has already arrived<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"Economists_A_US_housing_recession_has_already_arrived\"><\/span>Economists: A US housing recession has already arrived<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2022\/11\/d4f25b325c8d4a1fa8a83825b8da90ba.jpg?w=900\" \/><\/p>\n<div>\n<p>This\u00a0has been a year of watershed moments in real estate, and not the good kind.\u00a0<\/p>\n<p>The Housing Market Index, a closely watched industry metric\u00a0that gauges the outlook for home sales, declined to 33 in November on a hundred-point scale, its lowest level in a decade, save for the first dystopian month of the pandemic. Anything under 50 spells trouble.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\"><\/aside>\n<p>A month earlier, interest\u00a0rates on a standard 30-year mortgage passed 7 percent,\u00a0c<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ing the largest single-year increase in\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.freddiemac.com\/pmms\/pmms30\">at least 50 years<\/a>.\u00a0\u00a0<\/p>\n<p>\u201cJust to give you a sense of how far we\u2019ve come, we started the year around 3 percent,\u201d said Michael Fratantoni,\u00a0chief economist at the Mortgage Bankers Association. \u201cIt has just been a wild ride.\u201d\u00a0<\/p>\n<p>The difference\u00a0between a 3 percent interest rate and a 7 percent rate amounts\u00a0to $1,000 more in a monthly mortgage payment on a\u00a0mid-priced American home, according to Nadia Evangelou, senior economist at the National Association of Realtors.\u00a0<\/p>\n<p>Interest rates have retreated to 6.3 percent this month, seeding fresh hope\u00a0for the few remaining buyers on\u00a0a diminished\u00a0housing market.\u00a0<\/p>\n<p>After an unprecedented campaign of rate hikes, Federal Reserve Chairman Jerome Powell\u00a0has\u00a0signaled that the central bank will\u00a0ease up.\u00a0<\/p>\n<p>That\u2019s one reason mortgage rates are ticking down. The other is more sobering.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\"><\/aside>\n<p>\u201cWe, others, many market participants are forecasting a recession in the United States and many other places around the world,\u201d Fratantoni\u00a0said. \u201cThat puts downward pressure on the rates.\u201d\u00a0<\/p>\n<p>The housing market is already in recession\u00a0and has been since midsummer, according to the National Association of Home Builders, which publishes the\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nahb.org\/news-and-economics\/housing-economics\/indices\/housing-market-index\">Housing Market Index<\/a>\u00a0with Wells Fargo.\u00a0\u00a0\u00a0<\/p>\n<p>\u201cThe index has declined for 11 straight months,\u201d said Robert Dietz, chief economist for the homebuilders group. \u201cThis is going to be the first calendar year in 11 years where single-family starts,\u201d a measure of new home construction, \u201cwill total a smaller volume than the prior year.\u201d\u00a0He predicts a double-digit decline.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\"><\/aside>\n<p>Where the housing market goes, the broader economy follows. Dietz, Fratantoni\u00a0and\u00a0others in the industry expect the nation to tip into recession, a state of economic malaise <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly defined as two successive quarters of decline.\u00a0<\/p>\n<p>\u201cThe housing market leads the U.S. into recession, and it\u2019s likely to pull it out,\u201d Fratantoni\u00a0said, with recovery arriving\u00a0around the middle of next year.\u00a0<\/p>\n<p>\u00a0And what does all this mean for homeowners?\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\"><\/aside>\n<p>For most: Staying put. The vast majority of\u00a0homeowners are blessed with fixed-rate mortgages secured at historically low interest rates, under 4 percent.\u00a0There\u2019s little incentive to sell.\u00a0<\/p>\n<p>\u201cAnybody with a fixed-rate mortgage who got their mortgage before the middle of this year is in really good shape,\u201d Fratantoni\u00a0said.\u00a0<\/p>\n<p>A small percentage of homeowners, around\u00a01 in 10,\u00a0may be in trouble. They\u00a0hold adjustable-rate mortgages that will shortly\u00a0adjust to current rates, if they haven\u2019t already.\u00a0<\/p>\n<p>\u201cThose people are gonna\u00a0get hit,\u201d said Steven\u00a0Carvell, professor of finance at Cornell University.\u00a0\u00a0<\/p>\n<p>In the years before the Great Recession of 2008, adjustable-rate mortgages made up as much\u00a0as 35 percent of the home-lending\u00a0market. When prices tumbled, many borrowers owed as much as their\u00a0home was worth, if not more.\u00a0<\/p>\n<p>Economists expect no such meltdown in 2023. Nearly half of all current mortgages are \u201c<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.attomdata.com\/news\/market-trends\/home-sales-prices\/attom-q2-2022-u-s-home-equity-and-underwater-report\/\">equity rich<\/a>\u201d:\u00a0The borrowers owe less than half of what their\u00a0home\u00a0is worth, according to ATTOM, a real-estate analyst.\u00a0\u00a0<\/p>\n<p>Things could get ugly if home prices plummet. But economists don\u2019t expect that to happen in the current downturn.\u00a0<\/p>\n<p>\u201cTo be sure, we\u2019re going to see an uptick in foreclosures,\u201d Dietz said. \u201cBut we\u2019re not expecting it anywhere on the scale of last time.\u201d\u00a0<\/p>\n<p>More than 6 million families\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.law.nyu.edu\/news\/ideas\/michael-ohlrogge-great-recession-foreclosures#:~:text=The%20Great%20Recession%20that%20started,lost%20their%20homes%20to%20foreclosure.\">lost their homes to foreclosure<\/a>\u00a0in the Great Recession. That slump\u00a0followed years of overbuilding, Dietz said, yielding a housing surplus and plummeting home values.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr5_ab\"><\/aside>\n<p>Recent years, by contrast, have seen\u00a0\u201ca tremendous amount of underbuilding,\u201d\u00a0he said,\u00a0leaving a deficit of available housing.\u00a0\u00a0<\/p>\n<p>Mortgage delinquency rates, a measure of looming foreclosures, stand at historic lows,\u00a0Fratantoni\u00a0said.\u00a0\u00a0<\/p>\n<p>In the present housing recession, Fratantoni\u00a0said, \u201cif you have an owner who sees the market weakening, they just pull their property off the market.\u201d\u00a0<\/p>\n<p>The Fed raised interest rates, in part, to seed a \u201ccorrection\u201d in an overheated housing market. Home prices rose more than 40 percent from the beginning of 2020 to June 2022, according to the Case-Shiller U.S. National Home Price Index.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr6_ab\"><\/aside>\n<p>It worked. The index\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fred.stlouisfed.org\/series\/CSUSHPINSA\">has declined<\/a>\u00a0for three consecutive months, the steepest dip in a decade.\u00a0\u00a0<\/p>\n<p>Home prices remain higher now than they were a year ago, but that could change. Redfin, the real estate brokerage, predicts prices will decline by 4 percent in 2023, to a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>n value of $368,000.\u00a0<\/p>\n<p>\u201cThis doesn\u2019t necessarily mean that everyone\u2019s home value is starting to decline,\u201d said Daryl Fairweather, chief economist for Redfin. \u201cLuxury homes will decline in price the most. Affordable homes will likely maintain their value a bit better.\u201d\u00a0\u00a0<\/p>\n<p>A\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.redfin.com\/news\/housing-market-predictions-2023\/\">Redfin analysis<\/a>\u00a0suggests home\u00a0prices may hold up better\u00a0in areas of the Midwest and Northeast where values rose less dramatically in the pandemic years. Prices could fall farther\u00a0in pandemic boomtowns such as Phoenix; Austin, Texas;\u00a0and Boise, Idaho.\u00a0\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr7_ab\"><\/aside>\n<p>Housing analysts expect a much steeper\u00a0decline in home sales: a 15 percent drop in 2022 and a 7 percent decline in 2023, according to\u00a0the National Association of Realtors.\u00a0<\/p>\n<p>\u201cWe saw a record share of houses being taken off the market in the last 12 weeks,\u201d Fairweather said. Prospective sellers \u201care not willing to go down in price. They would rather keep the home and wait.\u201d\u00a0<\/p>\n<p>For the nation\u2019s real estate agents and home\u00a0sellers, \u201clast year was the best year since 2006,\u201d Evangelou\u00a0said.\u00a0\u00a0<\/p>\n<p>This year is one of\u00a0the worst.\u00a0<\/p>\n<p>Interview requests by The Hill to several prominent real estate agents\u00a0on Monday\u00a0went unanswered\u00a0or\u00a0were politely declined.\u00a0One Chicago agent\u00a0explained in an email that her sellers \u201care mostly waiting to list until next year.\u201d\u00a0<\/p>\n<p>Buyers\u00a0are suffering, too,\u00a0buffeted by high interest rates, inflated\u00a0asking prices and a vanishing inventory of homes for sale.\u00a0\u00a0<\/p>\n<p>First-time homebuyers face\u00a0particularly steep\u00a0odds. They cannot tap a reservoir of equity to finance a large down payment. Rents have risen, complicating the task of saving any down payment.\u00a0<\/p>\n<p>First-time buyers now make up only 26 percent of all home purchasers, the lowest share in recent years, according to a\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nar.realtor\/research-and-statistics\/research-reports\/highlights-from-the-profile-of-home-buyers-and-sellers\">national survey<\/a>\u00a0by the National Association of Realtors.\u00a0\u00a0<\/p>\n<p>As 2022 turns to 2023, all eyes will be trained on interest rates. Many observers say the highest rates are yet to come.\u00a0\u00a0<\/p>\n<p>\u201cOur forecast has them peaking around 7 1\/2 percent,\u201d Dietz said.\u00a0\u00a0<\/p>\n<p>But Redfin\u00a0forecasts\u00a0rates will eventually decline, sliding to\u00a05.8 percent\u00a0by the end of 2023.\u00a0\u00a0<\/p>\n<p>At a 5.8 percent interest rate, a prospective buyer with a $2,500 monthly budget could afford a $406,250 home. At a 6.5 percent rate, the same buyer could spend only\u00a0$383,750.\u00a0Just a year ago, with a 3 percent rate, the buyer could spend\u00a0$517,000.\u00a0\u00a0<\/p>\n<p>And yet, for all the tumult unleashed by the recent rate hikes,\u00a0a 6 or 7 percent interest rate is not particularly high, historically speaking.\u00a0<\/p>\n<p>\u201cThat\u2019s not in the crazy range,\u201d said Carvell\u00a0of Cornell. \u201cWe\u2019ve been in the crazy range. That\u2019s the fact.\u201d\n<\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thehill.com\/policy\/finance\/housing\/3764226-economists-a-us-housing-recession-has-already-arrived\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Economists: A US housing recession has already arrived This\u00a0has been a year of watershed moments in real estate, and not the good kind.\u00a0 The Housing Market Index, a closely watched industry metric\u00a0that gauges the outlook for home sales, declined to 33 in November on a hundred-point scale, its lowest level in a decade, save for&#8230;<\/p>\n","protected":false},"author":1,"featured_media":522809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2022\/11\/d4f25b325c8d4a1fa8a83825b8da90ba.jpg?w=1280","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[134417,134343,134661,80445,124783,115,4965],"class_list":["post-522808","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-blog-briefing-room","tag-campaign","tag-energy-environment","tag-healthcare","tag-international","tag-news","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/522808","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=522808"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/522808\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/522809"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=522808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=522808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=522808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}