From Business Insider:
House prices may be headed lower, dealing a blow to sellers but providing relief to buyers, two experts say.
“The only way out of the box, the only way to get sales back up is mortgage rates have to come down, incomes have to continue to improve, we have to avoid a recession, and I suspect we’ll have to see some house price declines at some point here,” Moody’s chief economist, Mark Zandi, told Yahoo Finance this week.
Redfin CEO Glenn Kelman made a similar call in a Fox News interview this week. Asked about Morgan Stanley’s latest forecast of a 3% drop in home prices next year, he replied that a decline “seems not just possible, but likely.”
Homeowners who locked in much cheaper rates have balked at selling up and paying heftier monthly payments for their next place. Meanwhile, prospective buyers have been priced out, and many are waiting for rates to fall instead of settling for a worse home than they wanted.
“Housing’s taken it on the chin, particularly demand,” Zandi said. He pointed to new data showing annualized sales of previously owned homes fell below 3.8 million units in October, the lowest figure in 13 years. “You have to go back to the teeth of the financial crisis to find sales that low,” he said.