A full-blown housing correction is already underway, and as home prices begin to fall nationwide, experts are expecting some popular markets to cool much faster than others. While housing economists like Moody’s Analytics’ Mark Zandi predict that national home prices could decline between 5% and 10% in the event of a recession, overvalued markets are expected to see even more substantial declines, Fortune reports.
In popular markets like Boise and Las Vegas, home prices could fall by 15% to 20% if a recession hits, especially as sellers are forced to respond to a drop in buyer demand thanks to elevated regional housing costs.
Falling home prices might be exactly what housing markets like Las Vegas and Boise need in order to get going again. At least that's according to Rick Palacios Jr., head of research at John Burns Real Estate Consulting.
"The longer that [mortgage] rates stay elevated, our view is that housing is going to continue to feel it and have this reset mode. And the affordability resetting mechanism right now that has to happen is on [home] prices. And so there are a lot of markets across the country where we're forecasting that home prices are going to fall double-digits," Palacios tells Fortune.
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