Fed officials have described the housing downturn as a "correction." For example, in an October 6 speech, Fed Governor Christopher J Waller said, "While this market correction could be fairly mild, I cannot dismiss the possibility of a much larger drop in demand and house prices before the market normalizes." He also said that "after mortgage rates stabilize, their drag on housing demand should ebb."
Mortgage rates are still soaring from around 3.00% late last year to over 7.00% recently. So mortgage applications for new purchases are diving (chart). Homebuilders are reporting that during October "traffic of prospective buyers" as well as current and future single-family new home sales were as depressed as during the 2020 lockdown recession (chart).