Why the pandemic-era housing booms did not last

Home prices are falling in the US and Europe after a surge during COVID-19, as interest rates rise at a rapid clip and economic growth slows. On this episode, we discuss what’s different about this housing market downturn, particularly the big changes in mortgage lending since the global financial crisis, and why the credit performance of outstanding European mortgages will likely be much more uneven in the current higher interest rate environment compared with mortgages in the US. We also discuss why many US consumers will still struggle with home affordability even as home prices come down.

Guests: Madhavi Bokil, Senior Vice President – Credit Strategy & Research, Moody’s Investors Service; Luisa De Gaetano Polverosi, Associate Managing Director – Structured Finance Group, Moody’s Investors Service.

Host: Jennifer Wong, Vice President – Senior Credit Officer, Sub-Sovereign Group, Moody’s Investors Service.

To read more on this topic, visit The Big Picture page on Moodys.com (some content only available to registered users or subscribers).

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