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The US housing market is under severe pressure, stocks might stage a year-end rally, and the Federal Reserve probably won’t raise interest rates much higher, a leading strategist has said.

The NAHB/Wells Fargo Housing Market Index, which measures homebuilders’ sentiment on a scale of 0 to 100 with 50 being neutral, fell for a 12th straight month to 31 in December. That was its lowest reading since mid-2012, excluding a blip in the data when the COVID-19 virus struck the US in early 2020.

Brian Jacobsen, a senior investment strategist at Allspring Global Investments, blamed the gloomy data on growing fear of a recession, which he expects to strike by the middle of 2023.

“It’s been bad for housing,” he told Yahoo Finance on Monday.