"Assessing Housing Market Risks: From Correction to Decline, Here's What to Expect"

Morningstar predicts a modest price correction in the national housing market, with house prices expected to be down between 4% to 6% from the peak by 2024. Factors supporting price resiliency include rate lock-in effect, conservative lending standards, and undersupplied housing stock. However, buyer exuberance during the pandemic and low borrowing costs pushed home prices to unsustainable levels in some markets. Morningstar identified the 15 housing markets with the highest correction risk, including San Diego, Austin, and Seattle, while the 15 markets with the lowest risk are predominantly in the eastern half of the country, such as Hartford and Syracuse.