As interest rates have risen to combat inflation, the investment bank forecasted that four US cities should prepare for a seismic decline.
As interest rates continue to skyrocket, home prices across the country have continued to plummet — and Goldman Sachs says the declines will only worsen and extend through 2023.
San Jose, California; Austin, Texas; Phoenix, Arizona; and San Diego, California will likely see boom and bust declines of more than 25%. “Our 2023 revised forecast primarily reflects our view that interest rates will remain at elevated levels longer than currently priced in, with 10-year Treasury yields peaking in 2023 Q3. As a result, we are raising our forecast for the 30-year fixed mortgage rate to 6.5% for year-end 2023 ,” the strategists say.
Goldman credits these cities as having the lowest prices in the coming year because they got too detached from fundamentals during the pandemic housing boom.
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