Housing market won’t come ‘unstuck’ until 2026, economists predict — here’s why
NY Post
The US housing market will not come “unstuck” until at least 2026 — and home affordability won’t improve without a recession, a team of Wall Street economists predicted.
The economists at Bank of America cited a “one-time shift” in demand during the pandemic for their less-than-rosy outlook.
“After a surge in housing activity during the pandemic, it has since retreated and stabilized,” Bank of America economists Michael Gapen and Jeseo Park wrote in a report Monday.
“We view the forces that have reduced affordability, created a lock-in effect for homeowners, and limited housing activity will remain in place through our forecast horizon,” they added.
Buyers flooded the housing market in 2020 and 2021 during the pandemic to take advantage of low mortgage rates, causing a spike in sales. Then inflation pushed interest rates in 2022 to 8%, the highest level in the United States since the early 1980s.
The US has since seen a decline in home sales. In May, they fell for the third month in a row.
