Housing Chartbook: Midyear Outlook

The Housing Market at a Turning Point

Source: Economics Group of Wells Fargo Bank, N.A.Summary There is little doubt the housing market has reached a clear turning point. Buyer traffic has fallen off, inventories have risen and sellers are increasingly reducing asking prices. The slowing is evident throughout the supply chain, with prices for lumber and other key building materials declining and mortgage lenders substantially reducing staff. While the housing market is turning, we do not expect the sector to endure a severe correction. Homeowners are sitting on a mountain of equity and mortgage underwriting has been far more cautious than in prior cycles, which means we are unlikely to see a repeat of the foreclosure crisis that occurred over a decade ago. Housing rarely escapes unscathed from a soft landing or a recession. We are in the midst of the former and are expecting to slide into the latter in coming quarters. New and existing home sales, new construction and home prices are all expected to pull back from their recent highs. READ FULL ARTICLE>>