Kelman Predicts Benefits for Buyers Amid Housing Affordability Improvements in Select US States

According to Redfin CEO Glenn Kelman, certain US states are already experiencing positive signs regarding housing affordability, despite the impact of rising mortgage rates. Kelman made these remarks during an interview with FOX Business, where he discussed the current state of the housing market and the potential implications of “sticky” inflation data. Economists predict that mortgage rates will remain elevated throughout 2024, only falling after the Federal Reserve begins to cut rates. However, Kelman suggests that people buying homes now will benefit from lower prices compared to those waiting until rates decrease again. Furthermore, while some potential buyers have hesitated due to higher mortgage rates, Kelman notes that once prices drop in popular destinations such as Texas and Florida, they will experience renewed interest. The expert highlights that the issue of persistently high home prices affects many areas outside of these regions. Nevertheless, Kelman points out that the ability to construct more homes in places like Florida and Texas with better regulatory environments for new construction is a promising sign. Nonetheless, Kelman notes that buyers and sellers tend to be cautious given the uncertain nature of the real estate market. A recent analysis by ResiClub reveals that home prices have risen significantly since the start of 2020, far exceeding the gains seen in recent decades. This surge in home prices has been attributed to underbuilding and a lack of inventory, exacerbated by the sharp increase in mortgage rates and costly building materials. Higher mortgage rates have also resulted in sellers being reluctant to sell, contributing to the scarcity of available properties for eager would-be buyers.