Housing is struggling under the weight of high borrowing costs – a problem unlikely to ease if, as we expect, the Fed holds rates steady this year due to tariff-driven inflation, followed by only a modest 50bp of loosening in 2026. We expect existing home sales to remain very weak, rising to just 4.3m annualised by end-2027. Weak demand allied with rising supply – as more people list their home for sale – creates a tough backdrop for house prices. However, we believe the market’s solid underlying fundamentals will prevent a slump. Instead, we expect prices to edge up by 1% this year, and by 2% in both 2026 and 2027.
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