“If that changed, and you had a huge unemployment situation, it’s inevitable that probably defaults would start after that, and then foreclosures follow from defaults. But as long as the job market stays strong and people can still make their payments that they’re locked into, I don’t see a huge default or foreclosure risk at this point.”

The latest data from the US Bureau of Labor Statistics shows that the unemployment rate increased slightly in October to 3.7% from 3.5%, although the number of jobs grew slightly by 261,000.

Read more: US foreclosure activity soars to almost pre-pandemic levels

And according to a recent report for real estate data firm, ATTOM, lenders started the foreclosure process on a total of 67,249 properties across the US in Q3 – revealing a massive 167% jump from a year ago. However, this was still below pre-pandemic levels.

Stroud however said that if the Fed can bring inflation under control, it will pivot away from implementing aggressive rate hikes, which he predicts will provide economic relief during the second half of 2023. Failing that, rate hikes could become the norm well into 2024, which would “crush demand” for homes.