{"id":91339,"date":"2025-07-25T12:18:22","date_gmt":"2025-07-25T12:18:22","guid":{"rendered":"https:\/\/www.europesays.com\/us\/91339\/"},"modified":"2025-07-25T12:18:22","modified_gmt":"2025-07-25T12:18:22","slug":"oxford-economics-says-the-crumbling-housing-market-will-continue-deteriorating-because-of-two-key-factors","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/91339\/","title":{"rendered":"Oxford Economics says the crumbling housing market will continue deteriorating because of two key factors"},"content":{"rendered":"\n<ul class=\"yf-1woyvo2\">\n<li class=\"yf-1woyvo2\">\n<p class=\"yf-1090901\"><strong>The housing market<\/strong> continues to struggle with nearly high mortgage rates and home prices, driven by years of undersupply and slow home construction. Builders face higher costs and labor shortages, and home price growth is expected to slow this year as sellers pull homes off the market.<\/p>\n<\/li>\n<\/ul>\n<p class=\"yf-1090901\">If you thought the housing market was bad enough: Buckle up.<\/p>\n<p class=\"yf-1090901\"><a href=\"https:\/\/fortune.com\/article\/current-mortgage-rates-report-07-22-2025\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:Mortgage rates;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">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.<\/p>\n<p class=\"yf-1090901\">Housing inventory is slightly rising overall, but it\u2019s not doing so by nearly enough, a May <a href=\"https:\/\/www.nar.realtor\/magazine\/real-estate-news\/inventory-is-rising-but-not-enough-a-new-report-warns\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:report;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">report<\/a> by the National Association of Realtors and <a href=\"http:\/\/realtor.com\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:Realtor.com;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">Realtor.com<\/a> shows. And an analyst note published this week by <a href=\"https:\/\/www.oxfordeconomics.com\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:Oxford Economics;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">Oxford Economics<\/a> said the housing market will continue to deteriorate this year.<\/p>\n<p class=\"yf-1090901\">\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 <a href=\"https:\/\/www.oxfordeconomics.com\/our-team\/page\/12\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:Matthew Martin;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">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<p class=\"yf-1090901\">Oxford Economics researchers also noted sellers will have less ability to pass along price increases. In other words, sellers will keep <a href=\"https:\/\/fortune.com\/2025\/07\/16\/housing-market-sellers-delistings\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:pulling their homes off the market;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">pulling their homes off the market<\/a> if they can\u2019t get a sale price they think they deserve.<\/p>\n<p class=\"yf-1090901\">Meanwhile, homebuilders will continue to face <a href=\"https:\/\/fortune.com\/2025\/03\/19\/new-home-construction-stalling-homebuilder-sentiment-sours-trump-tariffs\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:higher costs due to tariffs;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">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.<\/p>\n<p class=\"yf-1090901\">\u201cA longstanding lack of inventory has supported both high prices and sluggish sales in the market for existing homes,\u201d <a href=\"https:\/\/us.daiwacm.com\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:Daiwa Capital Markets;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">Daiwa Capital Markets<\/a> analysts Lawrence Werther and Brendan Stuart wrote in a <a href=\"https:\/\/www.uk.daiwacm.com\/media\/287521\/23jul25usdr.pdf\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:note;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">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<p class=\"yf-1090901\">Affordability is also hurting builders, who have had to continue offering incentives and price cuts.<\/p>\n<p class=\"yf-1090901\">\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 <a href=\"https:\/\/www.nar.realtor\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:National Association of Realtors;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">National Association of Realtors<\/a>, said in a statement. \u201cThis is holding back first-time home buyers from entering the market.\u201d<\/p>\n<p> Story Continues <\/p>\n<p class=\"yf-1090901\">\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 <a href=\"http:\/\/realtor.com\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:Realtor.com;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">Realtor.com<\/a> Chief Economist Danielle Hale said in a statement. \u201cIt\u2019s been concentrated in the Midwest and the South.\u201d<\/p>\n<p class=\"yf-1090901\">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.<\/p>\n<p class=\"yf-1090901\">\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<p class=\"yf-1090901\">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.<\/p>\n<p class=\"yf-1090901\">This story was originally featured on <a href=\"https:\/\/fortune.com\/2025\/07\/24\/housing-market-deteriorating-oxford-economics-recession-indicator\/\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:Fortune.com;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">Fortune.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The housing market continues to struggle with nearly high mortgage rates and home prices, driven by years of&hellip;\n","protected":false},"author":3,"featured_media":91340,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,453,79,60638,8166,4506,60637,16726,14606,11408,16719,67,132,68],"class_list":{"0":"post-91339","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economics","10":"tag-economy","11":"tag-homes-for-sale","12":"tag-housing-market","13":"tag-labor-market","14":"tag-labor-shortages","15":"tag-matthew-martin","16":"tag-mortgage-rates","17":"tag-national-association-of-realtors","18":"tag-oxford","19":"tag-united-states","20":"tag-unitedstates","21":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114913837317027541","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/91339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=91339"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/91339\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/91340"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=91339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=91339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=91339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}