FOX Business’ Katrina Campins discusses the rise in demand for mortgages, who will benefit, and the impact on the real estate industry.
America’s housing market remains stagnant, with just 25 out of 1,000 homes changing hands by 2024, according to the latest data from real estate firm Redfin.
The first eight months of the year marked the lowest level of income in at least 30 years, according to Redfin, which conducted a survey of housing changes compared to the first eight months of 2024 for different metro areas, homes and neighborhood types. It uses income as a measure of housing affordability.
In comparison, there have been 37% fewer homes sold this year compared to during the COVID-19 pandemic buying frenzy. In 2021, 40 houses out of every 1,000 changed hands. There were also 31% fewer homes sold compared to 2019, Redfin data showed.
ALMOST HALF OF RENTERS SPEND MORE THAN 30% OF RENT ON HOUSING, CENSUS BUREAU FINDS
High mortgage rates and record home prices with enough demand to continue to drive up prices have sidelined potential buyers and sellers, creating lower profits, according to Redfin economists.
While there is more inventory compared to a year ago, the company said there are still far fewer homes listed for sale compared to pre-pandemic levels.
A for sale sign is displayed outside a home for sale on August 16, 2024 in Los Angeles, California. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images) / Getty Images)
In addition, many buyers and sellers are giving up due to economic and political uncertainty. They’re taking a “wait-and-see” approach amid talk of a possible recession and a heated presidential election between two candidates with differing economic and housing policies, Redfin said.
The rate of activity has fallen across all property types in all areas over the past year, although condos and townhouses have seen the biggest declines, according to Redfin.
RENTAL PRICES CAN BE LOWER IN WINTER BUT BEWARE OPTIONS MAY BE LIMITED, EXPERT SAYS.
Scott Harris, an associate broker at The Harris Residential Team, told FOX Business that the market is “still stagnant” as it “takes time to bring the market back to life” for both buyers and sellers.
A “for sale” sign on a house in Philadelphia, Pennsylvania, on Aug. 16, 2024. (Joe Lamberti/Bloomberg via Getty Images/Getty Images)
The good news for consumers is that lower mortgage rates “have buyers more motivated,” according to Harris.
But sellers, especially those looking to buy right away, are facing a very different situation as more than 60% of outstanding mortgages are less than 4%, according to Harris.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Sellers were afraid of losing the minimum price they closed on and were “afraid to upgrade or downgrade in an area where mortgages are over 7%.”
However, with prices slowly falling, Harris said the market is finally returning “to a place where it’s starting to look interesting again for these sellers.”
Source link
