The CEO of Zillow just issued a warning that first-time homebuyers are beginning to drop out of the housing market in 2024. And that this reduction in buyer demand could hurt Zillow’s business and revenue in the second quarter.
Zillow makes their money by selling leads to realtors in their Premier Agent program. So a reduction in first-time homebuyer demand is of big concern. Buyers are dropping out the housing market because mortgage rates have surged over 7% while prices are still high. Creating historically bad housing affordability where the typical mortgage payment for buyers is now over $2,800/month.
This situation has led to a massive crash in homebuyer and mortgage demand. And that crash is starting to impact the housing markets in states like Texas, Florida, and Tennessee. Where we’re seeing the biggest surge in inventory and homes for sale. As well as lots of price cuts.
Data from Redfin shows that the price cut levels on the US housing market have surged to the highest rate in a decade. Suggesting there could be downward pressure on home prices later this year.
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