What Jeremy Siegel, Paul Krugman And 5 Others Have To Say About The Housing Market

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The alarm is sounding for American homeowners trying to sell their home, as rising mortgage rates frighten away purchasers. And, the U.S. housing market recession is only going to get worse, according to analysts.

According to recent data, existing home sales fell 28.4% in October, marking the ninth straight monthly loss and the longest dip since 2007. Homebuilding starts declined 22%, while new house listings fell 22%.

The Federal Reserve, which is rapidly hiking interest rates to combat 40-year high inflation, is to blame for the failing housing market. Mortgage rates have risen to 20-year highs as a result.

Read also: Housing Affordability Index: What This Tells You About Price Pressure

This has increased the cost of purchasing a home, causing purchasers to back off – mortgage applications are at their lowest level since 1997. Meanwhile, mounting fears of an impending economic downturn have depressed demand.

If you’re interested in making money in the stressed housing market, here’s how to invest as little as $100 to earn passive income and build wealth over the long term.

Jeremy Siegel, Wharton Professor of Finance

"I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside," Siegel told CNBC in a recent interview, noting that housing prices by any indicator are going down.

In a separate interview with CNBC, he said, "I think we're gonna have the second-biggest housing price decline since post WWII period over the next 12 months. That's a very, very significant factor for wealth [and] for equity in the housing market."

Mark Zandi, Chief Economist at Moody's Analytics

"Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough," he tweeted. "Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession."


David Rosenberg, Veteran Economist and Rosenberg Research Chief

"We have a massive housing bubble right now. Most of the household balance sheet is residential real estate, and it is equities," Rosenberg said.

Paul Krugman, Nobel Prize-Winning Economist

The senior economist thinks that a serious slump is on the way, but he believes it will be some time before increased interest rates have a significant impact on property prices and demand.

Ian Shepherdson, Chief Economist at Pantheon Macroeconomics

Shepherdson thinks that the precipitous reduction in home sales has not yet reached a bottom and that even purchasers who set their goals lower to find cheaper properties would face higher mortgage payments.

Don Peebles, Real Estate Developer and Peebles Corp CEO

"I think the housing market is on its way into a recession. We're going to see price declines — price declines have already begun to take place," Peebles told Fox News.

Chen Zhao, Economics Research Lead at Redfin

"The housing market is going to get worse before it gets better," Chao said last week, alongside a report that found a record 22% of homes for sale had a price drop in September.

To read about the latest developments in the industry, check out Benzinga's real estate home page.

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Posted In: Real EstateAlternative investmentsChen ZhaoDavid RosenbergDon PeeblesHousingJeremy SiegelMark ZandiPaul Krugman
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