""Declines in housing activity, including single-family home construction and sales, have been accompanied by higher inventories of homes for sale and falling house prices, suggesting that housing demand has also weakened," Bowman said. "Elevated mortgage rates may be exerting a more persistent drag as income growth expectations have declined while house prices remain high relative to rents.""
""Given very low housing affordability, existing home sales have remained depressed since 2023, and at levels only comparable with the early 2010s following the financial crisis. I am concerned that, in the current environment, declines in house prices could accelerate, posing downside risks to housing valuations, construction, and inflation," Bowman cautioned."
Housing activity has slowed significantly, with declines in single-family construction and sales alongside rising inventories and falling house prices in many markets. Elevated mortgage rates have reduced housing demand as income growth expectations have weakened while house prices remain high relative to rents. Persistently low affordability has kept existing home sales depressed since 2023 at levels comparable to the early 2010s. A sharper decline in home prices could weaken household balance sheets, slow residential construction, and pose downside risks to housing valuations and inflation, potentially rippling through the broader economy.
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