Economist Who Foresaw Housing Crunch Sees Home Prices Dropping
- Tom Lawler expects prices to fall 8% to 12% in next two years
- Key driver for drop is slowing US household formation
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An economist who foresaw the popping of the housing bubble more than 15 years ago expects US home prices to fall between 8% and 12% over the next two years as rising rates cut into pandemic-era demand.
Tom Lawler, a former economist for Fannie Mae, sees demand falling in part because a shrinking number of people are moving out on their own and forming households. That’s in part because during the early part of the pandemic in 2020, many people under the age of 34 moved back in with their parents, or didn’t leave the home they grew up in.