Written by Zahra Tayeb

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The US housing market is cratering, as the Fed's rapid interest rate hikes send mortgage costs soaring.

• Home sales have fallen for 8 months, and prices are dropping. But economists say worse is to come.

• Here's what Jeremy Siegel, Paul Krugman and 5 other top experts say about how painful things will get.

The alarm bell is already ringing for American homeowners, as surging mortgage rates scare away buyers — and the slump in the US housing market is only going to get worse, experts say.

The signs of stress have become blatant. Recent data showed that in September, existing home sales dropped 24% — the eighth straight monthly decline, marking the longest slide since 2007. Homebuilding starts slumped, and the number of new home listings fell 22%.

Behind the deteriorating housing market is the Federal Reserve, which is aggressively raising interest rates to fight 40-year high inflation. That has sent mortgage rates soaring to 20-year highs.

That has made buying a home more expensive, prompting buyers to back off — mortgage applications are at their lowest since 1997. Meanwhile, growing concerns about a coming economic recession have dampened demand.

Here's what 7 top experts are warning about what happens next.

Jeremy Siegel, Wharton professor of finance

"I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside," Siegel told CNBC in a recent interview, noting that housing prices by any indicator are going down.

In a separate interview with CNBC, he said: "I think we're gonna have the second-biggest housing price decline since post WWII period over the next 12 months. That's a very, very significant factor for wealth [and] for equity in the housing market."

Mark Zandi, chief economist at Moody's Analytics

"Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough," he said in a recent tweet. "Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession."

In a recent housing report, he said: "The housing market is the most interest-rate-sensitive sector of the economy. It's on the front lines of the fallout from the Fed's efforts to bring down inflation."

"There's going to be a coast-to-coast downturn in the housing market. It's going to be brutal. No part of the market is immune."

David Rosenberg, veteran economist and Rosenberg Research chief

"We have a massive housing bubble right now. Most of the household balance sheet is residential real estate, and it is equities," Rosenberg said in a RealVision interview released this week.

The economist pointed to the Fed's tightening efforts to bring inflation down from recent rates of 8-9% to its 2% target.

"They want the stock market to go down. They want home prices to go down. Why? Because there's not a snowball's chance in hell they're going to get to their 2% holy grail consumer inflation, without there being a period now of asset deflation. It is 100% necessary."

Paul Krugman, Nobel Prize-winning economist

The veteran economist agrees there's a severe downturn coming — but he expects it will be a while before higher rates really hit home prices and demand.

"The Fed's rate hikes have indeed led to a sharp fall in applications for building permits. However, construction employment hasn't yet even begun to decline, presumably because many workers are still busy finishing houses started when rates were lower," he said in a recent comment piece.

"And the wider economic effects of the coming housing slump are still many months away," he said.

Ian Shepherdson, chief economist at Pantheon Macroeconomics

Shepherdson believes the steep drop in home sales hasn't hit bottom yet, and even buyers who set their sights lower to cheaper houses will still face bigger mortgage payments.

"We expect a drop of 15-to-20% over the next year, in order to restore the pre-COVID price-to-income ratio," the strategist said in a note last week.

"In short, housing is in free-fall. So far, most of the hit is in sales volumes, but prices are now falling too, and they have a long way to go."

Don Peebles, real estate developer and Peebles Corp. CEO

"I think the housing market is on its way into a recession. We're going to see price declines — price declines have already begun to take place," Peebles told Fox News last week.

"I look at this as though we have this freight train out of control, speeding up, speeding up with low interest rates, and no one looked to start slowing it down or stepping on the brakes. Now all of a sudden its going to come crashing into the station," he said.

Chen Zhao, economics research lead at real estate brokerage Redfin

"The housing market is going to get worse before it gets better," Chao said last week, alongside a report that found a record 22% of homes for sale had a price drop in September.

"With inflation still rampant, the Federal Reserve will likely continue hiking interest rates. That means we may not see high mortgage rates — the primary killer of housing demand — decline until early to mid-2023."