Housing Market Echoes 1980s as High Rates, Inflation Could Spark New Recession

The current housing market resembles the 1980s market due to high inflation, rising interest rates, and a wave of millennial homebuyers. This could lead to a "housing recession" like in the 1980s.

Aggressive interest rate hikes by the Federal Reserve to fight inflation have caused mortgage rates to surge, reducing housing affordability.

Home sales have dropped significantly, though prices have remained high due to demand from millennials reaching prime homebuying age.

Demographics helped support the 1980s housing market despite high rates, similar to how millennial buyers support today's market.

If high mortgage rates persist, home prices could stagnate or fall 5% by end of 2024, per Morgan Stanley, sparking a frozen housing market.