Simply two weeks after Goldman Sachs downgraded its outlook for the U.S. housing market in a paper titled “Getting worse earlier than getting higher,” the funding financial institution reversed course on Jan. 23 in a paper titled “2023 Housing Outlook: Discovering a Trough.”

As an alternative of U.S. residence costs falling 6.1% in 2023, which was their Jan. 10 prediction, researchers on the funding financial institution now anticipate nationwide residence costs to finish 2023 down simply 2.6%.

By the point U.S. residence costs backside out this summer season, Goldman Sachs says nationwide residence costs will likely be down round 6% from its June 2022 peak. Beforehand, Goldman Sachs researchers have been anticipating that peak-to-trough decline to come back in nearer to 10%.

“We anticipate a peak-to-trough decline in nationwide residence costs of roughly 6% and for costs to cease declining round mid-year. On a regional foundation, we mission bigger declines throughout the Pacific Coast and Southwest areas—which have seen the biggest will increase in stock on common—and extra modest declines throughout the Mid-Atlantic and Midwest—which have maintained higher affordability over the previous couple years,” wrote Goldman Sachs researchers.

Why the upward revision? Current information, Goldman Sachs says, factors to an uptick in homebuyer demand.

“Dwelling gross sales seem set to show greater. Mortgage buy purposes have averaged 9% above their October trough to this point in January and survey-based measures of buying intentions have rebounded sharply,” wrote Goldman Sachs researchers.

To get a greater concept of the place each nationwide and regional residence costs is perhaps headed, Fortune requested Goldman Sachs to supply us with their full forecast.

Let’s have a look.

In contrast to KPMG, Goldman Sachs doesn’t anticipate a double-digit residence worth correction. The funding financial institution says there are three the reason why a steeper correction will not occur this cycle.

“First, the speedy build-up of untapped residence fairness over the past couple years implies that even when costs declined extra sharply than we anticipate, solely a small share of mortgage debtors could be underwater,” wrote Goldman Sachs researchers. “Second, over 90% of excellent mortgages are fastened price, that means that the rise in rates of interest won’t result in a spike in debt service prices for most owners. And third, family stability sheets stay robust, with low mixture leverage and appreciable remaining pent-up financial savings from the COVID-19 pandemic.”

These three components, Goldman Sachs says, ought to forestall the potential “for the cascading defaults that contributed to the post-GFC drawdown.” That earlier correction—after the 2007/2008 international monetary disaster (GFC), which noticed U.S. residence costs fall 26% between 2007 and 2012—is 4 occasions higher than the 6% peak-to-trough decline Goldman Sachs is predicting this time round.