The Recession in the US Housing Market is Not Over yet



Despite recent signs of stabilisation, including an increase in new home sales and falling mortgage rates, Fannie Mae warns that the housing market downturn in the US is not over yet and could even become more severe as the summer and fall months approach.

The US housing market has been a source of concern for many in recent years, and according to the US National Mortgage Association, more trouble may be on the horizon.

Despite recent signs of stabilisation, including an increase in new home sales and falling mortgage rates, Fannie Mae warns that the housing market downturn in the US is not over yet and could even become more severe as the summer and fall months approach.

The Recession in the US Housing Market is Not Over yet

Fannie Mae's prediction model forecast a decline in residential fixed investment over the next few quarters, with the condominium segment expected to erase any economic incentives created by the private housing segment. This is due to the fact that the housing market has been in recession for the past year, and the downturn is predicted to spread and push the country's macro-economy into a recession.

However, Fannie Mae also believes that the housing market will help cushion against a deep recession. The organization predicts that although house prices will decline over the next couple of years, this will be a slight correction rather than a collapse.

One reason for this is the lack of housing supply, with the number of homes for sale still 40% lower than before the pandemic. Even if house prices do decline, they are predicted to bottom out in Q4/2024 at 5.28% below their peak in Q2/2022.

It remains to be seen what will happen to the US housing market in the coming months and years, but it is clear that the situation is far from stable. While Fannie Mae's predictions may be cause for concern, we can only hope that the housing market will recover sooner rather than later.

The Recession in the US Housing Market is Not Over yet

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