Barron's Live
MarketWatch - What Will Fall First, Mortgage Rates or Home Prices?
Sep 27, 2023
Join MarketWatch real-estate reporter Aarthi Swaminathan and Skylar Olsen, chief economist at Zillow, as they discuss the impact of falling mortgage rates on the housing market, the effects of climate change on the Florida housing market, the concept of assumable mortgages, trade-offs in getting a mortgage, and market data including short-term rental markets.
35:04
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Quick takeaways
- High mortgage rates and low supply are pricing many Americans out of the housing market, leading to a slowdown in sales volumes and a decrease in new listings.
- The resolution of high mortgage rates is crucial for unfreezing the housing market, as it can align monthly payments with rents, improve affordability, and incentivize sellers to put their homes on the market.
Deep dives
Housing Market Challenges due to High Mortgage Rates and Low Supply
The US housing market is facing challenges due to high mortgage rates and low supply. The high mortgage rates are making homes less affordable for buyers, as home prices are already high. Existing homeowners are also hesitant to sell and lose their low mortgage rates. This has led to a slowdown in sales volumes and a decrease in new listings. While some areas, like Austin and New Orleans, are experiencing home price declines, other places, like Boise and Seattle, are stabilizing due to low inventory. Overall, the housing market is facing a transition period with a potential impact on prices.
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