As the Federal Reserve’s effort to combat inflation has pushed interest rates skyward, housing market signals have turned negative, leading many industry analysts to ask if a housing recession coming and some to suggest that it has already arrived.   

 The overheated employment market appears to be cooling off, but probably not fast enough to demonstrate the progress the Federal Reserve wants to see in its efforts to combat inflation, still growing at an uncomfortable 8 percent annual rate.

The nation’s red hot labor market cooled a bit in August, indicating that the Federal Reserve’s inflation-fighting efforts may be having the desired effect.  But Fed officials aren’t declaring victory yet. 

We talk about inflection points, moments in time when significant changes can fundamentally alter established personal, political or economic norms.  We may be approaching just such a point in the housing market, where the seemingly inexorable upward trend in home prices may be reversed, where the ‘balance of power’ may be shifting from sellers to byers, and where a significant “correction’ may already be under way.

The housing slowdown some analysts have been predicting for more than a year has arrived – perhaps.  That’s not a unanimous view, but it does reflect what appears to be a growing consensus, supported by an array of negative indicators that are becoming harder to dismiss or to ignore.