Sarah Wolfe, a senior economist and strategist at Morgan Stanley Wealth Management, noted in a June 16 report that even if mortgage rates eventually fall to 5% (their baseline scenario), the proportion of monthly payments to household income will remain around 21%, significantly higher than the average of 15% before 2022. The report projects home prices to rise by approximately 2% in 2026 and 3% in 2027, primarily supported by limited supply and stable demand. The firm believes that the housing market is not experiencing a temporary downturn but is resetting to a more constrained equilibrium.