Mike Miedler, CEO of real estate brokerage franchisor Century 21, described the hikes as the “fastest” the housing market has ever seen in history. He noted though that the rates were still on par with what is “probably the 50-year average for a mortgage rate in this country.”
“I don’t see anytime soon we’re going to be going back to 2% or 3% mortgage rates. I think we’re probably somewhere in this 5% to 7% range for the foreseeable future,” said Meidler.
Real estate pressures
In speaking with Miedler, The Associated Press was able to gather some insights on the pressures on the real estate market. On national home sales inventory increasing but remaining limited at around 1.1 million homes, Meidler said the current market is “kind of” going into a macro supply and demand issue. He noted there were not enough creative first-time homebuyer situation properties being developed, which could solve the issue.
“If you look over the Great Recession from a real estate perspective here in 2008-2012, when so many people lost their homes to foreclosure and you overbuilt, what’s happened this last decade is we’re anywhere from 3.5 million to 5-plus million homes short,” said Meidler. “We’re kind of going into a macro supply and demand issue, which is you’ve got the largest generations in US history—millennials and Gen-Z—entering their main homebuying years, and we just don’t have enough property to sell and for people to move into. [Homebuilders] are developing more of what I would call high-end properties, but not enough creative first-time homebuyer situation properties. And I think that’s really the solve to all of this.”
Meidler said the current shortage in supply would likely persist if there’s not a lot of movement in rates. The number of existing homes sold would likely remain around four million units as compared to at least five million units sold as has been the case over the last decade.
Source: mpamag.com