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Reaching unseen mortgage interest rates and slowing home sales, the housing market is all but “normal.” James Egan, Morgan Stanley’s U.S. housing strategist, says that most statistics used to forecast housing activity—whether homes sales or housing starts—are at levels either never seen before or that haven’t been seen in decades.

So many homeowners staying in place thanks to higher mortgage rates could help put a floor on prices. But it will almost certainly be bad news for realtors as new home sales fall off a cliff. Sales volume is already decreasing at a faster pace than during the global financial crisis thanks to the combination of deteriorating affordability and low supply of new homes hitting the market.

“When a home is transacted, it looks at the last time that home was transacted,” Egan says. “And so if we're not going to be selling those homes at lower prices than they were purchased, that’s going to help support home price activity. But on the other side of this, it means that that existing homeowner is also not buying another home after they sell theirs, which we think is going to kind of exacerbate the decrease in sales volumes.”

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