High mortgage

have all but shut down the market for new home sales over the past year.

So what's the outlook for the housing market heading into the spring's selling season?

When you think about the average mortgage being made, right now it's around $450,000 at a 3%

mortgage rate, that's 1,800 bucks a month, but at a 7% mortgage rate is 3,000. So the affordability shock that happened certainly

dried up a lot of the demand.

I'm Allison Nathan and colleague Roger Ashworth who covers the housing market for Goldman Sachs research and is a senior

strategist on the structured credit research team. We'll be talking about his outlook for home prices and the supply

and demand dynamics that have created one of the tightest markets in decades.

Roger is joining me here in our New York studio.

Roger, welcome to the program.

Thanks, Allison.

Roger, as I just said, the market for new home sales is exceptionally tight today.

If I'm not mistaken, home sales last year dropped to their lowest levels in nearly three decades.

That's pretty remarkable.

So walk us through how we got here.

Thanks, Allison. Yeah, the existing home sales figures are running around 3.7 million homes

per annum and that's certainly low relative to history and how we got here I

boil it down to three factors one mortgage rates when we look back over the

history of mortgage rates over the past few years in 2021 we had a 3% mortgage rate and by the end of 22 we had about a 7%

mortgage rate. By the end of 2023 it was about 7.8% almost 8%. Currently is around 7. So that big shock and interest rates and the impact on the mortgage

payment is just forced demand out of the market. When you think about the average mortgage

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