The residential real estate market has screeched to a halt, and some economists believe home prices are about to drop significantly.
The big picture: Existing home sales have fallen for nine straight months. The supply of single-family homes is growing. And with mortgage rates near 7%, experts say a large-scale housing slowdown is becoming increasingly likely.
What they're saying: "In one line: Collapse in prices is coming," wrote Kieran Clancy, senior U.S. economist at Pantheon Macroeconomics.
- Pantheon estimates that existing home prices will keep falling, ultimately dropping by about 20% from their June peak of around $414,000.
- Goldman Sachs analysts also recently cut their outlook for home prices, from roughly flat next year to down 4%, noting that "unsustainable levels of housing affordability to continue weighing on housing demand."
Between the lines: Until recently, economists had pooh-poohed the prospect of a nationwide price slump, suggesting that persistently low inventories of houses to buy would put something of a floor under the market.