Mortgage News - Reffkin Expects A Surge In Inventory Once Mortgage Rates Drop To 5%

Reffkin Expects A Surge In Inventory Once Mortgage Rates Drop To 5%

Mortgage News July 17, 2023

According to Compass CEO Robert Reffkin, if mortgage rates return to around 5%-5.5%, it could encourage sellers to list their properties and reignite the fervor in the real estate market that was seen during the pandemic.

In a CNBC interview, Compass CEO Robert Reffkin shared his belief that a sustainable mortgage rate of 5%-5.5% would likely lead to an increase in available properties, resembling the high demand experienced during the pandemic.

Currently, sellers hold a significant advantage in the housing market due to the persistently high demand outweighing the supply of available properties. Buyers are willing to accept mortgage rates in the range of 6% or 7%, further intensifying the pressure on the limited inventory. Analysts attribute this situation to the “lock-in” effect, with approximately 30% of homeowners locked into rates at 3% or lower, and 70% locked in at 4% or lower.

According to Reffkin, certain homebuyers are already successfully lowering their mortgage rates to the 5% range by utilizing buydowns.

According to Reffkin, there are indeed incentives and buydowns available in several markets that are effectively reducing mortgage rates by a significant two points..

In the current situation, homebuilders are taking advantage of the substantial housing demand and reaping the benefits of a modest increase in house prices observed in May. Builder confidence and housing starts remained robust during the previous month.

Reffkin noted that the current market presents a favorable opportunity for homebuilders, as they are benefiting from price increases resulting from low inventory. He further emphasized that homebuilders are successfully meeting the demand of buyers. In a positive development, the sentiment index of homebuilders improved for the first time in over a year, leading to the highest number of housing starts since 2016.

Need a loan officer list, real estate agent list, insurance agent list, investment advisor list or contractor list in your area? Contact Jennifer Swanson at 260-223-9203 or Jennifer@SpecialtyContactDatabases.com

Mortgage News Blog

Reffkin Expects A Surge In Inventory Once Mortgage Rates Drop To 5%

Contact Us/Order Samples