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- Housing indicators have sent mixed signals, muddying the picture on where the market is headed.
- Regional differences have also been playing a considerable role in the data.
- "Economic forecasts, just in general, have been hit by more surprises than they are in a stable period."
These days, housing market indicators and forecasts have been confusing — albeit not necessarily contradictory.
For example, some analysts and data suggest an imminent crash, while others signal a rebound is underway.
"There's always a range of opinions about the economy," Comerica Chief Economist Bill Adams said, later adding: "The economy has been very volatile in the last couple of years. And economic forecasts, just in general, have been hit by more surprises than they are in a stable period."
It may also have to do with whom you ask, as surveyed consumers and housing analysts tend to gauge the market differently, and may not be paying attention to the same measures.
"Consumers who aren't shopping for a mortgage right now might not realize how high mortgage rates have gone," he said, though they may still be surveyed.
Meanwhile, Adams added that national averages can obscure stark regional differences, which have varied significantly, potentially causing diverging viewpoints.
Here are some recent mixed signals:
The US housing market is crashing and soaring at the same time
The regional divide in the housing market is exemplified in this east-west split. According to data from Black Knight, home prices on the West Coast are plunging at the same time home prices on the East Coast are surging.
This phenomenon didn't occur even during the 2008 global financial crisis. The differences have much to do with each region's housing supplies, as well as tech layoffs in the West which may have weakened demand in major cities.
Home prices are in their worst slump in over a decade
Home prices have dropped seven months in a row, marking the long losing streak since 2012, as the Federal Reserve's rate hikes have brought up mortgages.
The S&P CoreLogic Case-Shiller National Home Price Index slipped 0.2% in January from the prior month. Year-over-year, the index climbed 3.8% in January, slower than the prior month's 5.6% rate and the smallest annual gain since 2019.
The housing market contraction is coming to an end
The National Association of Realtors said pending home sales rose for the third consecutive month in February, with residential mortgage loans due to become more available as demand grows.
"After nearly a year, the housing sector's contraction is coming to an end," NAR Chief Economist Lawrence Yun said in a statement. "Existing-home sales, pending contracts and new-home construction pending contracts have turned the corner and climbed for the past three months."
But again, watch for the regional differences, as the West saw a 2.4% decline in pending sales, while the Northeast led all four regions with a 6.4% jump.
Americans haven't been this gloomy on home prices since at least 2014
A US consumer survey released by the New York Federal Reserve shows that households expect home prices to rise this year by 2.6%, down from last year's forecast for a 7% gain and the lowest reading since the data set began in 2014.
Households also see 30-year mortgage rates surging beyond 8%, a level not seen since 2000, up from the current rate of 6.38%.