📝U.S. Home Price Index To Fall 7.4% Every 1% Increase In Mortgage Rates: Natixis

A correction of 5% in U.S. home prices over the next year seems reasonable. Increasing mortgage rates are set to cool housing demand, with the model predicting a 7.4% fall in the S&P CoreLogic Case-Shiller national home price index for every 1% increase in mortgage rates. The current low inventory of homes for sale--and the fact that supply-chain issues are hampering the completion of new homes--would keep the fall in prices to the mid-single digits. The negative wealth effects associated with both a stock and home price correction would be highly deleterious for the U.S. macro economy. - Natixis