US housing market crash coming?

He said: “It’s one thing to buy a $354,000 house when mortgage rates are at 2.5%, for example, whereas today they’re over 5%. And because underwriting and lending standards are still strict, lenders still aren’t particularly keen to just say, ‘we’ll wing it, just this loan that you probably can’t afford’ and hope for the best.”

Read more: ARMs of mass destruction?

First-time buyers in particular, were more vulnerable, he added: “First time buyers, who maybe don’t have a lot of cash for something like a down payment, haven’t had as much time to build a good credit score, so they’re probably going to have a harder time even getting a loan in the first place. Add that in with the fact that inflation is high and that it’s just harder to buy basic necessities – and they need extra money for that.”

Channel’s views were echoed by fellow economist Lawrence Yun, from the NAR, who said the figures for pending sales “are telling” as “they better reflect the timelier impact from higher mortgage rates than do closings”.

He predicted pending home sales “to be off by 9% this year”, while home price appreciation will slow to 5% by the end of the year, representing a sharp drop from recent gains of almost 20% annually.