The U.S. housing market has been flashing signs of revving back up this year after its stratospheric climb during the pandemic — this despite the Federal Reserve’s efforts to cool demand and force inflation lower with sharply higher interest rates.
“I don’t see a collapse unfolding like we saw in the global financial crisis [of 2008],” said Tracy Chen, portfolio manager in the global fixed-income team at Brandywine Global Investment Management, referring to the wreckage unleashed in financial markets after home prices fell by over one-fifth on average from 2007 levels.
Chen said some signs of a recovery have emerged in the housing market this year, if only briefly, including when in January the 30-year mortgage rate dipped to around 6% before heading back closer to 7.1% in the first week of March, according to Mortgage News Daily. A housing-market rut “My view is that the U.S. housing market is stuck,” Chen said, noting that buyers remain hampered by low affordability and sellers haven’t wanted to budge much on price, given that the majority locked in historically low 30-year fixed rates of slightly more than 3%.
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