{"id":1507724,"date":"2024-12-13T11:55:00","date_gmt":"2024-12-13T16:55:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1507724"},"modified":"2024-12-13T11:55:00","modified_gmt":"2024-12-13T16:55:00","slug":"goldman-delivers-grim-outlook-for-prospective-homebuyers","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/goldman-delivers-grim-outlook-for-prospective-homebuyers\/1507724\/","title":{"rendered":"Goldman Delivers Grim Outlook For Prospective Homebuyers"},"content":{"rendered":"

Goldman Delivers Grim Outlook For Prospective Homebuyers<\/span><\/p>\n

\n

Goldman’s latest note to clients offers little optimism for resolving the housing affordability crisis in 2025<\/strong>. Mortgage rates are expected to remain elevated while housing prices trend at record highs, further exacerbating challenges for prospective buyers and likely keeping many on the sidelines.\u00a0<\/p>\n

“Our mortgage strategy team’s expectations rates will hold in the low-to-mid 6% range<\/strong>” next year, said analysts\u00a0Susan Maklari and\u00a0Charles Perron-Piche, adding, “This will keep existing home sales 24% below the 2015-19 average<\/strong>.”\u00a0<\/p>\n

They offered clients the understanding that there would be no meaningful relief for prospective buyers as the affordability crisis<\/strong> will linger through next year:\u00a0<\/p>\n

“Despite our <\/em>macro team predicting another 125bps of Fed rate cuts through September 2025, our credit strategy team forecasts the 30-year fixed mortgage rate will end 2025 at 6.3<\/em><\/strong>%, down just 30bps from 6.6% anticipated at the end of this year and only 39bps below current levels.”<\/em><\/p>\n

Given the latest inflation data, a\u00a0largely in-line CPI report<\/a> followed by a ‘red hot<\/a>‘ PPI print in November, this data suggests that longer-term yields are to stay higher over the medium- to longer-term, according to Bloomberg’s Simon White<\/a>.<\/p>\n

In other words, White suggests that this inflation data squashes the dovish party.\u00a0As of late Thursday, the market is pricing in only two rate cuts for next year.<\/p>\n

Goldman analysts noted that without interest rate relief<\/strong> and the general leanness of housing inventory<\/strong>, home prices are forecasted to increase by 3% YoY.\u00a0<\/p>\n

“Said differently, we estimate the mortgage payment on a median-priced single-family home is 35% of the median household income. Although this is down from 39% a year ago, it remains well above the 30% threshold for most lenders<\/strong>,” they explained.<\/p>\n

The analysts then provided clients with a state affordability tracker<\/strong> for the last month.\u00a0<\/p>\n

<\/a><\/p>\n

Impact of Changing Rates and Home Prices on Monthly Mortgage Payments as a % of Income<\/strong><\/p>\n

<\/a><\/p>\n

“The affordability headwinds<\/strong> will be most pronounced on resales, with existing home transactions holding at 4.1mn in 2025 vs the 2015-19 average of 5.4mn. This reflects the lock-in effect, which we believe will remain a headwind for the next several years<\/strong>,” the analysts said, adding, “Homeowners would be reluctant to move even if rates declined to the high-5% range<\/strong>.”<\/p>\n

Goldman has delivered some grim news<\/strong> for prospective homebuyers sitting on the sidelines: the affordability crisis is nowhere near being resolved<\/strong>.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 12\/13\/2024 – 06:55<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/goldman-delivers-grim-outlook-prospective-homebuyers<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Goldman Delivers Grim Outlook For Prospective Homebuyers Goldman’s latest note to clients offers little optimism for resolving the housing affordability crisis in 2025. Mortgage rates…<\/p>\n","protected":false},"author":0,"featured_media":1507725,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1507724","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1507724","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1507724"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1507724\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1507725"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1507724"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1507724"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1507724"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}