Why One Top Economist Says the Housing Market Recession Is Over

In the fall of 2022, the housing market underwent a lengthy correction that experts said would eventually restore balance for buyers and sellers alike. Fast forward to June 2023 and that tipping point may have finally been reached. After a period of sluggish new-home sales and existing home sales, spiking mortgage rates, and sky-high home price increases in Western housing markets such as Reno, Nev., and Boise, Idaho, the housing market has hit a bottom and is now beginning to climb.

Resurgent buyer demand is leading to an uptick in national home prices and new home sales, but low supply will prevent prices from soaring to the unprecedented levels seen mid-pandemic, Fortune reports.

Here’s what Zonda chief economist Ali Wolf has to say:

Objectively, the housing recession in the new home space is over. Home sales are rising, starts are rising, and home prices are rising again. The big question is – is that it? Are we back in growth mode from here? I’m not so sure it is a straight line up. There are still broader economic concerns that could impact housing demand, including potential turmoil following the Federal Reserve’s restrictive policy, a significant pullback in consumer spending, or even the fallout from the commercial real estate sector. We are watching closely to see if there’s a double-dip recession in housing or if demographic-supported demand is enough to withstand wider issues.

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