As the U.S. housing market continues to cool, a growing number of forecasters say homeowners could soon experience significant price declines. These analysts look at the record run-up in home prices during the COVID pandemic and say a drop of 20% or more looms in the near future.
“We’re at very, very frothy levels right now,” says James Knightley, chief international economist at ING Bank, the global financial institution. “Prices do tend to overshoot to the downside.”
Knightley isn’t the only analyst to predict a sharp decline in home values coming soon. “For affordability to come back to 2020 [levels] at current interest rates, housing prices have to decline more than 40%,” says Vitaliy Katsenelson, CEO and chief investment officer at Investment Management Associates.
