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 count on 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 probably 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 count on 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 undertaking 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 better affordability over the previous couple years,” wrote Goldman Sachs researchers.

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

“House gross sales seem set to show larger. Mortgage buy functions 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 thought of the place each nationwide and regional residence costs could be headed, Fortune requested Goldman Sachs to offer us with their full forecast.

Let’s have a look.

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

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

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