Redfin Chief Economist: Mid-Year Housing Market Predictions + Update

"in the South there's been a lot of multif family construction so I think rents could still go down and that would just pull even more people into the rental market and uh stall demand for for homes for sale"

"in the long run there will still be demand for homes for sale but that's because rents will go up and people will eventually find it you know financially beneficial to buy instead of to rent"

"they might not come down as much as people were hoping they would come down they're probably not going to go down to 3% or even 4%"

"I think long run interest rates you know might equalize at around 5 and a half per."

"if there was another recession I think interest rates could drop down below 4% again"

"as interest rates come down demand will come back uh to support stronger price growth"

"I don't think that affordability will improve in the long run unless we get significantly more Supply online"

"the rise in demand will be greater than the potential rise in Supply and for a quick econ lesson that will put upward pressure on pricing yes and and and the kinds of sellers who are sensitive to interest rates are the kinds of sellers who are buying again so even for every one of them that lists their home they're going to be buying a home and adding to demand so I think that it almost necessarily has to be disproportionate that there would be more demand than added Supply"

"I think you know for the most part we're anticipating that this will be a another down year or not down because it'll be up from last year but down historically year for sales it would be difficult for listings to increase enough to like support a lot more purchases this year so unfortunately it's just it is what it is but I guess the the optimistic take is that we don't think it will get worse than it is right now so if you have business right now and things are good from your perspective then I wouldn't expect that to change too much anything I would expect there just be more buyers in the market... the lack of inventory that's that's the weird part I don't think that's going to change this year"

"over time the lock and effect will ease people who bought homes in 2022 at 5% interest rates could potentially be ready to sell again already by 2025 I mean it'll be a little bit on the early end but we'll just start to see um the impact of what happened in 2020 and 2021 fade as it just becomes part of the distant past... yeah it's going to naturally fade but it'll probably fade over the course of like a decade"

"I think that the kind of Supply will start to see will be the homes that were built during the pandemic going up for resale those will be the the kinds of existing homes and you know you can look at like where those are located um they were mostly in the South and in the exurbs and in rural areas or suburbs because that was that's what was popular then but those existing homes that have been around since before 2019 those are probably still going to feel that lock in effect"