HousingWire Daily Mike Simonsen on addressing the housing affordability crisis
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Jan 23, 2025 Mike Simonsen, President of Altos Research, dives into the pressing housing affordability crisis. He discusses the significant drop in home sales linked to soaring mortgage rates and how this challenges buyers as spring approaches. Simonsen sheds light on regional market trends and inventory changes, particularly in Buffalo. He also highlights the broader implications of recent policies on housing supply and prices, urging listeners to consider how these dynamics will shape the future of home buying.
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Slowing Home Sales
- Home sales are slowing, with pending sales down 10% year-over-year.
- This trend, observed in the third week of January, follows a period of growth in the fourth quarter of the previous year.
Rate Impact on Sales
- Sales momentum from Q4 2023, driven by briefly lower rates, has disappeared.
- Sustained lower rates, perhaps closer to 6%, are needed to significantly improve affordability and boost sales.
Affordability Crisis Factors
- Increased property taxes, insurance, and higher home costs contribute to the affordability crisis.
- Buyers adapt by aiming for lower-priced homes instead of stopping buying altogether.