![]() Goldman Sachs also forecasts that many Northeastern, Southeastern, and Midwestern markets could see milder corrections. The bank says these cities will suffer the lowest prices this year because they became too detached from fundamentals during the COVID-19 pandemic housing boom. RELATED: Hawaii governor proposes plan to invest $1 billion in affordable housing "That said, overheated housing markets in the Southwest and Pacific coast, such as San Jose MSA, Austin MSA, Phoenix MSA, and San Diego MSA will likely grapple with peak-to-trough declines of over 25%, presenting localized risk of higher delinquencies for mortgages originated in 2022 or late 2021." "This decline should be small enough as to avoid broad mortgage credit stress, with a sharp increase in foreclosures nationwide seeming unlikely," Goldman Sachs wrote. ![]() In 2022, mortgage rates jumped from 3% to 6%. "As a result, we are raising our forecast for the 30-year fixed mortgage rate to 6.5% for year-end 2023 (representing a 30 bp increase from our prior expectation)." "Our 2023 revised forecast primarily reflects our view that interest rates will remain at elevated levels longer than currently priced in, with 10-year Treasury yields peaking in 2023 Q3," Goldman Sachs strategists wrote, according to the New York Post. ![]() Lawrence Yun, chief economist with the National Association of Realtors, discusses its impact on the housing market. The feds announced another aggressive rate hike - the third consecutive increase of three-quarters of a percentage point and the sixth rate hike this year alone. How high interest rates are impacting the housing market ![]()
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