The housing market hasn't seen a climate like this in a long time—but when exactly is a big question. To go by existing home sales, it hasn't been this bad since 2010, the depths of the Great Recession, as a 15% collapse in September sent transactions to a 13-year low, a "deep freeze" that Zillow had warned about back in the spring. Other economists, such as Mark Fleming from First American and Jeseo Park from Bank of America Research, see conditions that recall the "housing recession" of the 1980s. Morgan Stanley took the temperature of the market earlier this week and saw just more pain for homebuyers ahead: An up to 5% rise in home prices nationwide, reversing its previous call for prices to fall amid high mortgage rates. Zillow is taking the opposite tack.
After their February call that U.S. home prices had hit bottom, Zillow economists had been raising their home price forecast each month through August. At that point, they predicted home prices would climb 6.5% over the next 12 months. Last month, though, they issued a downward revision. And this month, they did it again.
