The RE/MAX National Housing Report for August 2022 shows that homes sold, on average, 1% below asking price for the first time in years. If it wasn’t apparent before, the housing market is experiencing change.
RE/MAX President and CEO Nick Bailey joined Fox Business’ The Claman Countdown to share his up-to-date analysis of current housing market and mortgage rate trends.
“We are rebalancing or returning to a more balanced market,” Bailey explained. “We’ve had over 125 consecutive months of run up in pricing… That’s just not sustainable long term.”
He continued, “There’s opportunity for buyers [with] more inventory. They’re not bidding against one another, and they’ve got an opportunity to negotiate.”
Bailey notes that while the Fed is raising interest rates in the U.S. to control inflation, the rate hikes aren’t necessarily directly tied to mortgage rates and that buyers have a plethora of financing options when trying to enter the market.
“Now people are talking about the return to adjustable-rate mortgages. The 5/1 ARM [and] 7/1 ARM… are lower than the 30-year fixed,” Bailey said. “These alternates are coming back, which means buyers have a choice. It’s not only the 30-year fixed [mortgage] that people should be looking at.”
He adds, “Housing and the demand for housing are still strong. We’re estimating there’s still between four and four-and-a-half million homes that we’re short across the [U.S.]. And so as long as demand remains high, it is going to continue to provide opportunity for buyers.”
Bailey explains that the debt-to-income ratio has risen over the past decade and increased wages, too.
“We’re still sitting with record low unemployment. …One of the number one drivers of people buying houses is if they have jobs,” he said. “And so as long as unemployment remains low, even with rates moving around a bit, I believe that we’re still going to continue to see a fairly strong housing market.”
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Written by LAUREN DRESCHER
