Prices for lumber fell to a new 2022 low this week, reports Matthew Fox for Markets Insider. The essential building commodity fell as much as 4% to $465 per thousand board feet, decisively below the low seen in early August of $470. The price decline may be seen by some as a positive sign, but Goldman Sachs believes that is also indicative of a housing market slowdown that may last longer than expected.

"The sustained reduction in affordability, waning pandemic tailwind, and recent decline in purchasing intentions suggest that home sales are likely to fall further," Goldman said. The bank expects existing home sales to fall 12% in August, while it expects new home sales to be flat.

Home prices have remained relatively resilient even as sales have cooled down. But Goldman expects that to change soon.

"Our model suggests that home price growth will slow sharply in the next couple quarters ... as the imbalance between supply and demand continues to shrink, mostly through lower demand," analysts said.

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