The negative news keeps on coming in for the housing sector. That’s no surprise, given the recent surge in mortgage rates.

Pictet’s construction activity has been dropping sharply recently. The index is a composite gauge of actual US construction activity. It leads home prices by roughly one year historically. The index signals that the decline in home prices is in its initial stages.

Past recessions, characterized by declining home prices, tended to be more severe in the US.

Sources: Patrick Zweifel, Pictet Asset Management, CEIC, Refinitiv