Our latest US housing outlook is available here, and we remain constructive.
Why?
Because we only get a recession when the economy experiences a big shock such as Covid, Lehman, the IT bubble bursting, and the commercial real estate crisis in the early 1990s.
Today is not such a shock.
Today, we are experiencing a gradual slowdown engineered by the Fed. The Fed raised interest rates to slow down the economy to slow down inflation.
Inflation has now come down, and the Fed can begin to focus on other parts of the economy, particularly the labor market but also the housing market. If the Fed doesn’t like what they see, they will lower interest rates faster.
The bottom line is that the ongoing soft landing in the economy also implies a soft landing in the housing market.
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