The case for optimism is that America’s property market has found a floor. Buyers are returning but the covid-era frenzy is not. A decent spring season could, in theory, allow prices to stabilise and builders to resume construction, boosting growth without stoking inflation. The case for pessimism rests on the idea that the interaction between the property market and inflationary trends is too powerful to ignore: if buyers return to a supply-constrained housing market, price rises will follow. And if the Fed sees that such a rate-sensitive sector as property is not responding to tighter monetary policy, it may judge that it needs to be more hawkish. Unfortunately for America, and the world, the pessimistic case looks more plausible.
Source: America’s property market suggests recession is on the way | The Economist
