Today, in the Calculated Risk Real Estate Newsletter: Goldman See US House Prices Falling 5% to 10%
Excerpt: The recent weakness in the housing market, combined with mortgage rates close to 7%, have led to some downwards revisions to house price forecasts. For example, from Goldman Sachs economists today:Our G10 home price model suggests sizable nominal home prices declines from the peak of around 15% in Canada, 5-10% in the US, and under 5% in the UK. … We view the risks to these estimates as tilted to the downside
emphasis addedThis is a significant downgrade from Goldman’s “stall” forecast from just a few weeks ago. …
It now appears house prices are falling even though inventory levels are still historically fairly low (by measures of active inventory or months of supply). … Here is a look at existing home months-of-supply (inverted, from the NAR) vs. the seasonally adjusted month-to-month price change in the Case-Shiller National Index (both since January 1999 through July 2022). Note that the months-of-supply is not seasonally adjusted.
The last three months are in black showing a possible shift in the relationship.