Housing Market 2023: When Will the Housing Market Recession End and What’s the Impact on the Broader Economy?

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by Jacob Solomon May 23, 2023 News
Housing Market 2023: When Will the Housing Market Recession End and What’s the Impact on the Broader Economy?

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The US housing market has seen prices fall for three months in a row. The first housing price drop in more than a decade happened. Between March and April, home sales fell.

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The experts at Fannie Mae believe that the housing market downturn could lead to a modest recession in the second half of the 20th century. The Fed is likely to hold onto its economic policies if wage inflation continues. "Inflation has been resistant to Fed efforts to drive it down, and we view the risks to our baseline forecast as tilted toward more tightening rather than easing," said Doug Duncan, senior vice president and chief economist.

According to Forbes, many homeowners don't want to sell because of high mortgage interest rates. A lock-in effect is what Fannie Mae calls this. Today's mortgage rates are below that of homeowners. Homeowners are holding onto their houses because of the uncertainty in the market, which could help slow the decline of prices.

Prospective buyers are turning to new homes because there are fewer existing homes on the market. That is positive for the economy as it shows confidence.

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The housing market is so high that banks are losing money.

We expect the recession to be modest due to housing. It continues to perform better than expected, and we expect that its strength will help the economy to expand again in 2024.

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