What can’t the Simpsons predict? In Fed Chair Jerome Powell’s views, the housing market will likely experience a “correction” — seeing it as a “good thing.” But economists believe that the housing market is already in a “deep recession.”

Remember the good days?

When interest rates were near zero — everyone rushed to purchase or refinance a home. With the 30-year mortgage rate now passing 6%, markets have deteriorated:

• U.S. home sales have fallen for 7 weeks in a row.
• U.S. home prices in August fell 6% from their June peak — the largest two-month drop in a decade.
• U.S. home listings fell 23% in August from a year ago.

Would-be buyers are staying on the sideline, and higher rates make it more challenging to attain a loan.

No part of the housing market was spared. Stocks of mortgage lenders, construction companies and real estate tech platforms have fallen hard.

• The S&P 500 Real Estate Index is down 26% this year.
• The SPDR S&P Homebuilders ETF (NYSE:XHB) is down 35% this year.

Layoffs were widespread. In July alone, 3,600 employees were laid off from mortgage banking and brokerage shops.

Investors: The burning questions…

Are we in for a 2008 housing crash? Few think so. In the 2008 financial crisis, banks took on too much risk and poorly underwritten loans. Today, borrowers have stronger credit, tighter rules are in place, and banks are less exposed (Axios).

What’ll happen to prices? They’ll continue dropping. Moody’s Analytics’ Mark Zandi thinks home prices will fall another 10% from their peak and as much as 20% in hot markets like Phoenix. In a recession, that could change to 15% and 30%, respectively.

Will the Fed stop raising rates to prevent a housing crash? Housing analysts believe so. Another 0.75 percentage rate hike is expected in the next Fed meeting, but analysts think a 0.50 percentage hike is more likely — given the dire state of the housing market.

Will mortgage rates return to their previous levels? Don’t expect rates to fall back to their COVID lows. The regional VP of William Raveis Mortgage told Axios that it would take an unlikely global crisis to get back to 3%.