Many homebuyers, investors, and realtors are now wondering – will these Fed Rate Cuts stimulate the housing market? And cause more homebuyers to come back to the market?
In this video, Reventure Consulting analyzes the data on home price affordability and finds that the U.S. Housing Market is a long way off from being affordable again for homebuyers. In order to restore affordability to long-term levels, both home values and mortgage rates would need to decline significantly.
The reason is because homebuyer demand is so low today – existing home sales are down 25% from normal, while mortgage applications are down 38%. Homebuyers appear reticent to head back into the market given the sky-high prices.
However, in some areas such as Florida, values are now dropping. Home values in Florida are down 3.8% over the last year, and on some listings they are down over 25% from peak. Lower prices is starting to bring some buyers back into the Florida housing market, as affordability improves.