MarketWatch reports that some economists believe the slowing U.S. housing market could drive the global gross domestic product to its lowest annual pace in 10 years.
“A combined slump in house prices and housing investment in the major economies could cut world growth to a 10-year low of 2.2% by 2020 – and to below 2% if it also triggered a tightening in global credit conditions.” the Oxford Economics researchers wrote.
The researchers said that while home values globally aren’t falling outright, the pace of expansion has stalled substantially, which has raised some alarm bells. “Moreover, high house price valuations point to a risk of prices falling in the quarters ahead,” Slater and Payne wrote. The economists say that retreat in prices could spill over to the rest of the globe.
Advertisement
Related Stories
Economics
Mortgage Rate Declines Could Boost Home Sales Following Months of Low Activity
Encouraging economic news bumped mortgage applications up by 2.6% for the week ending May 3
Affordability
American Families Are Spending a Quarter of Their Income on Mortgage Payments
The average monthly mortgage payment is up more than 9% year-over-year
Affordability
Is Fractional Homeownership Any Kind of Solution for Housing Attainability?
The imbalance between housing supply and demand is spurring some innovative options within the real estate industry
