We think markets are too optimistic about Fed rate cuts this year, meaning the recent dip in mortgage rates is just a temporary respite. We expect rates to rebound to 7% and hover around that level throughout the rest of the year. There is still room for sales to improve, aided by less restrictive supply conditions, though the recovery will be very shallow, with existing home sales reaching 4.3m annualised by year-end and 4.7m by end-2026. House price growth will average 4% this year and next as the market remains in a cooler period after the red-hot post-pandemic years.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services