The Federal Reserve has hiked 375bps in just six meetings this year. Mortgage rates have followed suit, skyrocketing from a low of 2.7% in February to 7.35% earlier this month. The aggressive tightening of monetary conditions has sparked an affordability crisis — sidelining millions of potential homebuyers while existing home sales crash to the worst level since 2008.
Higher borrowing costs triggered a sharp drop in mortgage applications and home sales in the back half of the year. Deal flow is drying up for many real estate agents, resulting in financial duress that may worsen into early 2023.
In October, a shocking 37% of real estate agents struggled to pay office rent — a 10% increase from the prior month, according to Yahoo, citing a new report via Redfin. The figure could worsen as the housing market rapidly cools via the Fed-induced demand side crunch.
Such rapid heating of the housing market during the pandemic era brought in an influx of new agents. The National Association of Realtors said membership hit an all-time high of 1.56 million in 2021 (pandemic boom year) — up from 1.49 million the year before.
While we don’t expect a similar 2008-09 housing crash, the Federal Reserve Bank of Dallas warned last week that home prices could plunge 20% next year due to affordability woes.
In October, existing home sales tumbled to 28.4% – its worst since 2008.
Absent the nadir of the COVID lockdowns, this is the lowest existing home sales SAAR since Dec 2011…
Wah wah wah. My whole life I saved and invested and spent as little as possible. Now rising interest rates are providing generous, almost risk free, investment opportunities and I’m sitting pretty. Those of you who spent as much as you could afford at any time, including on your house, will pay the price, rewarding me for my patience and self discipline which you have simply never had. Too bad for you. You need to learn to defer your gratification. You don’t need all the junk you’ve bought. Sorry, not sorry. I guess you’ll blame democrats instead of yourselves.
Oh, BooHoo.
Better start looking for another line of work
one man’s junk is another man’s treasure. enjoy living in the ghetto!
Don’t feel sorry for any of them !!! All they do is RIP off everyone !!!! You don’t need them FSBO is Better !!!!!
Just get the Blank contract papers signed & head to a Lawyer for closing !!! NO REALTOR !!!!!