News & Media
NEW YORK – The 7% mortgage rate may be considered too high for those who experienced the historically low rates throughout the pandemic, but Compass CEO Robert Reffkin says if rates were to come down a little more, the real-estate market might be closer to equilibrium.
“I think 6.5% I’d feel good about … but the magic number is 5.9999,” he said. “That’d be marketing magic and would tell the world that mortgage rates are at a level where they should go and grab a property.”
Current daily rates for a 30-year fixed mortgage were near 7.02% and weekly rates hovered near 6.87%. Reffkin explains that with rates hovering near 7%, “we are going to continue to be at a low 4 million seasonally adjusted annual rate of home sales.”
In May, existing home sales data showed sales dipping 0.7% from April and 2.8% from a year ago to a seasonally adjusted annual rate of 4.11 million. Last year, existing home sales fell to about 3.8 million, their lowest level in nearly 30 years. A lot of the decline has been tied to homeowners with ultralow rates not wanting to sell their homes.
According to a Realtor.com analysis of Federal Housing Finance Agency (FHFA) data, more than 50% outstanding mortgages have a rate of 4% or lower, and home prices and mortgages are high, dampening demand.
Reffkin says, “Prices last month were the highest in recorded history, and the reason they’re the highest is because there’s not enough supply.” He does expect home prices to be “relatively flat on a month-over-month basis.”
Fortune (06/24/24) Botros, Alena
© Copyright 2024 Smithbucklin
