Mortgage rates that briefly touched a 20-year high this week aren’t likely to crash this U.S. housing market, according to Al Otero, portfolio manager for HAUS, Armada ETF Advisors. Instead, a robust employment backdrop and the huge equity cushion homeowners have been sitting on after two years of enormous price gains will give the housing market “a lot of wiggle room, even if we get pushed into a recession,” Otero said, by phone.
“I think the housing market can take a pretty big beating, because it has gone up so far, so fast. Letting some air out of that balloon is healthy,” he said, adding that a fall in home prices of 10%-15% wouldn’t necessarily be a bad thing after their 45% surge nationally during the pandemic. In some markets like Tampa and Phoenix those increases have been closer to 71%, according to Black Knight data. “It stinks if you are a recent home purchaser, because it will take a bit more time to get above water,” Otero said. But overall, he sees housing as healthier than it was a decade ago after the subprime bubble popped, fueling the global financial crisis and breeding a new class of institutional landlords. In the new hou …