While many economists and homebuyers are holding their breath as prices rise ahead of a busy spring buying season, one market expert suggests that a slowdown could be just around the corner, MarketWatch reports. Ian Shepherdson, chief economist and founder of research consulting firm Pantheon Macroeconomics, predicts that existing-home sales will drop 25% from 6.02 million in February to 4.5 million by the end of summer 2022.
Shepherdson points to a drop in mortgage demand as the trigger for upcoming deceleration, meaning that a lack of affordability will push more buyers out of the housing market and cause a subsequent decline in prices.
The ripple effects of a shift in existing-home sales would be far-reaching, Shepherdson said, arguing that the pace of rent increases would eventually slow and perhaps even reverse. It also would spread to new-home sales, which he expects will likewise fall. A decrease in new-home sales would represent a downward drag on GDP, since that would implicate less demand for services tied to home-building and less spending on items like building materials and appliances.
Advertisement
Related Stories
New-Home Sales
Mortgage Rates Are Up but New-Home Sales Still Solid in March
Lack of existing home inventory drove a rise in new-home sales, despite higher interest rates in March
Labor + Trade Relations
Who's Earning What in Construction
Workers in construction management roles may earn a higher median wage, but on average, lower-paid occupations have experienced somewhat faster wage growth
Build to Rent
Build-to-Rent Is Booming, Particularly in These Metros
A recent report finds that the Phoenix metro leads with more than 4,000 build-to-rent units completed in 2023, and Texas is the leading state for build-to-rent development
