Goldman Sachs published research this week. Its economists expect housing to be less of a “drag” on the economy going forward, reports the Wall St. Journal.
Housing subtracted 1.1 percentage points from annualized gross domestic product growth last quarter. But will subtract just 0.25% by the fourth quarter of 2023, according to the article.
Housing is a key component of the economy. The Federal Reserve’s battle against inflation has hit the market hard. As rates rose, housing demand fell across the country.
Rates are expected to stabilize now, after falling from their 7% peak at the end of 2022. Goldman economists predict home sales will bottom this quarter, then rebound, the Journal said.
They are also predicting home prices will continue to fall.
Goldman’s economists expect a 6% decline across the country, with the bottom coming in the middle of this year.
Other economists are predicting less of a decline. Zillow’s latest has U.S. home values falling just 1.1% between November 2022 and November 2023.