Keep an eye on housing market indicators this week for activity in the property sector.

While there’s not much economic data out this week, real estate watchers will be eyeing the housing market for some updates. The S&P CoreLogic Case-Shiller National Home Price Index is set to be published on Tuesday at 9 a.m. ET, and will likely show the third straight month of price declines. The Pending Home Sales Index for November will also be released on Wednesday following its sharpest decline on record the previous month.

Bigger picture: Activity in the property sector has been heavily influenced by the Fed’s aggressive rate hiking cycle. The 30-year fixed-rate mortgage even jumped to as high as 7% in the fall, and while it recently eased back to 6.3%, monthly mortgage payments are soaring. According to the Mortgage Bankers Association, home payments at the median U.S. price are up 43% YTD.

“Coming out of the pandemic, rates were very low, people wanted to buy houses, they wanted to get out of the cities and buy houses in the suburbs because of COVID,” Fed Chair Jerome Powell said in a speech last month. “So you really had a housing bubble, you had housing prices going up to very unsustainable levels and overheating and that kind of thing. Now the housing market will go through the other side of that and hopefully come out in a better place between supply and demand.”

Outlook: While it may be a near-term detriment for investors, a cooling housing market is just what the Fed wants in terms of lowering inflation and economic activity. However, if things go too far, a hard landing could be in store in 2023 as the U.S. plunges into recession. In that event, Moody’s Analytics forecasts that house prices will fall between 5%-10%, and in 183 overvalued areas, properties could crash 15%-20%.