While the lack of homes for sale is a clear tailwind for U.S. home prices, deteriorated housing affordability—the result of mortgage rates spiking from 3% to over 6% just after national house prices soared over 40% during the Pandemic Housing Boom—remains a clear headwind for prices. That's according to the latest report by Morningstar.
Researchers at Morningstar, a leading investment research firm, put out a new paper predicting that the national housing market is still passing through a "modest price correction." By the time national prices bottom in 2024, Morningstar expects house prices to be down between 4% to 6% from the peak. That'd pale in comparison to the 27% peak-to-trough decline that national house prices saw during the crash between 2007 and 2012.
