Some Analysts Say US in Housing Recession

The Federal Reserve’s aggressive efforts to ratchet up interest rates have spurred concerns that the U.S. economy is heading toward a recession. But one pivotal industry may already be there.

The housing market has cooled so much as the Fed withdraws its support for the economy that some analysts say it may be in a slump. Mortgage rates nearly doubled in the first half of the year. The Fitch ratings service has raised the specter of a “severe” downturn that could send home prices tumbling. Housing starts plunged in July. Builder confidence has declined the most since the 2008 meltdown, and new home sales last month were down 30 percent from the previous year, Census data shows.

“I think we’re in a housing recession right now,” said Robert Dietz, chief economist at the National Association of Home Builders. “After a year and a half of post-Covid housing strength, this isn’t just a retrenchment to a more normalized trend — this is definitely a weakening.”

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