{"id":34467,"date":"2025-07-24T19:34:07","date_gmt":"2025-07-24T19:34:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/34467\/"},"modified":"2025-07-24T19:34:07","modified_gmt":"2025-07-24T19:34:07","slug":"oxford-economics-says-the-crumbling-housing-market-will-continue-deteriorating-because-of-two-key-factors","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/34467\/","title":{"rendered":"Oxford Economics says the crumbling housing market will continue deteriorating because of two key factors"},"content":{"rendered":"

Mortgage rates<\/a> are still nearly 7% and home prices are 55% higher than they were at the beginning of 2020, according to the Case-Shiller U.S. National Home Price Index.\u00a0<\/p>\n

Housing inventory is slightly rising overall, but it\u2019s not doing so by nearly enough, a May report<\/a> by the National Association of Realtors and Realtor.com<\/a> shows. And an analyst note published this week by Oxford Economics<\/a> said the housing market will continue to deteriorate this year.\u00a0<\/p>\n

\u201cThe supply of existing homes for sale is approaching pre-pandemic levels as a combination of high prices, elevated mortgage rates, and concerns over the labor market keep buyers sidelined,\u201d Oxford Economics analyst Matthew Martin<\/a> wrote in a note titled Recession Monitor \u2013 Real test for economy is just beginning. \u201cThe new-home market is also being challenged, with builders continuing to offer incentives including price cuts in an effort to move unsold inventory.\u201d<\/p>\n

Oxford Economics researchers also noted sellers will have less ability to pass along price increases. In other words, sellers will keep pulling their homes off the market<\/a> if they can\u2019t get a sale price they think they deserve.\u00a0<\/p>\n

Meanwhile, homebuilders will continue to face higher costs due to tariffs<\/a> and a reduced labor force because of fewer immigrants and more deportations, according to Oxford Economics. This, in turn, will slow housing starts\u2014a.k.a. new construction\u2014which won\u2019t help inventory levels.\u00a0<\/p>\n

\u201cA longstanding lack of inventory has supported both high prices and sluggish sales in the market for existing homes,\u201d Daiwa Capital Markets<\/a> analysts Lawrence Werther and Brendan Stuart wrote in a note<\/a> published Wednesday. \u201cSubstantial improvement is unlikely to materialize in the near term until mortgage rates (and\/or prices) ease, thereby mitigating the current affordability challenges faced by potential buyers.\u201d<\/p>\n

Affordability is also hurting builders, who have had to continue offering incentives and price cuts.\u00a0<\/p>\n

\u201cMultiple years of undersupply are driving the record high home price. Home construction continues to lag population growth,\u201d Lawrence Yun, chief economist for the National Association of Realtors<\/a>, said in a statement. \u201cThis is holding back first-time home buyers from entering the market.\u201d<\/p>\n

\u201cWe still don\u2019t have an abundance of homes that are affordable to low- and moderate-income households, and the progress that we\u2019ve seen is not happening everywhere,\u201d Realtor.com<\/a> Chief Economist Danielle Hale said in a statement. \u201cIt\u2019s been concentrated in the Midwest and the South.\u201d<\/p>\n

However, that leads to one small silver lining predicted by Oxford Economics. Due to labor-market concerns and weak demand (thanks to currently high home prices and mortgage rates), they predict home price growth will slow and builders will limit new-home construction.\u00a0\u00a0<\/p>\n

\u201cSlower home price growth may provide a floor beneath sales,\u201d Martin wrote, but \u201chousehold appetites for spending will largely hinge on the health of the labor market.\u201d<\/p>\n

Despite a struggling housing market, Oxford Economics predicts the U.S. will avoid a recession this year and the Federal Reserve will start to \u201ccut rates aggressively\u201d at the beginning of 2026.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Mortgage rates are still nearly 7% and home prices are 55% higher than they were at the beginning…\n","protected":false},"author":2,"featured_media":34468,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[28,2053,25744,28548,28549,16751,7176,112],"class_list":["post-34467","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-business","tag-housing","tag-housing-costs","tag-housing-crisis","tag-housing-data","tag-housing-inventory","tag-housing-prices","tag-markets"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/34467","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=34467"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/34467\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/34468"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=34467"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=34467"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=34467"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}