With mortgage rates still high, many prospective homebuyers are waiting on the sidelines until rates come down. The impact of these higher rates is evident in the housing market data, as housing starts fell 14.7% in March from February, marking a 4.3% year-over-year decline.
Douglas Elliman Licensed Real Estate Salesperson Timothy Malone and Compass NYC Real Estate Broker Mickey Conlon joins Wealth! to discuss the current state of the housing market.
Malone explains that with mortgage rates so high, the current buyers in the market are those who "need to buy right now," while everyone else is waiting on the sidelines. He advised buyers to "negotiate the sales price," as the sellers who "need to sell right now are very negotiable." However, Malone cautions against waiting, as rates drop and demand increases, it will become more challenging to find a home.
Conlon acknowledges the pent-up demand in the market, noting that buyers will eventually make moves due to life changes or financial pressures. He observes that buyers have slowly started returning to the market, buoyed by the prospect of the Federal Reserve’s proposed rate cuts, which "has helped to get us over the hump" of housing market stagnation. However, Conlon warns that the possibility of no rate cuts "is real." He emphasizes that while current rates are not historically bad for the housing market, buyers have become "drunk" on the low-rate scenario.
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