From the NY Post:
The ongoing plunge in US home prices may be nearing its end, Goldman Sachs analysts said in a note to clients this week.
Long-term mortgage rates have cooled by nearly a full percentage point after surging above 7% as the Federal Reserve enacted a series of interest rate hikes last year. The trend should improve housing affordability and cause price declines to reach a floor, according to the Wall Street Bank.
“The sharpest declines in the US housing market are now behind us,” Goldman analysts Ronnie Walker and Vinay Viswanathan said in a client note released on Monday.
The strategists added that they “expect a peak-to-trough decline in national home prices of roughly 6% and for prices to stop declining around mid-year.”
Overheated housing markets on the West Coast and in the Southwest will likely experience “larger declines” in home prices compared to the national rate due to a glut in inventory, the note said. Meanwhile, markets located in the Mid-Atlantic and Midwest regions will see “more most declines.”
The surge in mortgage rates has caused a major correction in the US housing market in recent months, sending prospective buyers to the sidelines and causing sellers to rethink their plans or slash their asking prices to lure interest.
Other firms, including Pantheon Macroeconomics, project larger declines in home prices before a floor is reached. In December, Pantheon’s Ian Shepherdson said prices could fall by up to 20% during a multi-year market correction.