Moody’s Chief Economist: Housing Will ‘Struggle’ for Next 12, 18 Months, Economy Will Be ‘Tough’ in 2023, ‘Long Way to Go’ on Inflation

On Monday’s broadcast of CNN’s “Early Start,” Moody’s Analytics Chief Economist Mark Zandi said that we have “a long way to go to get back to anything anyone would feel comfortable with” on inflation, stated that even if the economy avoids a recession, it will “struggle next year, it’s going to be a tough year.” And predicted, “housing’s going to struggle here over the next 12, 18 months.”

Zandi said that he thinks inflation “has peaked and [is] moving in the right direction. But having said that, we’ve got a long way to go to get back to anything anyone would feel comfortable with.” And “the economy, under any scenario, recession, no recession is going to struggle next year, it’s going to be a tough year.”

He later added, “Well, housing’s taking it on the chin, but that’s to be expected. I mean, again, the Fed is raising rates to try to cool off the economy, get that inflation back down. And there’s no more interest rate-sensitive sector in the economy, right? I mean, if most people want to buy a home, they’ve got to go get a mortgage, and that’s tied right into interest rates. And so, — and of course, house prices went skyward back when the rates were record lows a year, a year-and-a-half ago. And so, you mix the now high house prices with these high mortgage rates, people just can’t afford it. And, so they’ve been just pulling out of the market. So, housing’s going to struggle here over the next 12, 18 months. And I do expect some meaningful price declines. But again, that’s part of the script, right? I mean, the economy’s going to slow. This part of the economy is going to slow more than others.”

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