US housing market price correction to hit ‘coast to coast,’ economist warns

An influential economist said this week that the blazing US housing market from the epidemic era is on the cusp of a "coast to coast" price correction as the Federal Reserve raises interest rates.

Moody's Analytics' chief economist, Mark Zandi, stated that his company anticipates a decline in housing prices in the most intensely competitive and expensive markets.

The anticipated price declines coincide with a sharp increase in mortgage loan rates that has reduced prospective homeowners' purchasing power.

According to the firm's study, the downturn will probably have an effect on the Arizonan cities of Phoenix and Tucson as well as North and South Carolina and some areas of Florida.

Boise, Idaho, which Moody's has dubbed "the most inflated market in the country," is one of the major cities that could be impacted.

At a bipartisan housing policy forum in Washington, DC, Zandi warned of the impending real estate market slump, according to Bloomberg.

Over the past few years, home prices have sharply increased due to low mortgage rates, a shortage of available properties, and soaring interest during COVID-19 lockdowns.

A pattern that is predicted to slow as the Fed's monetary policy tightens and mortgage rates get closer to 6 percent.