Home sales are up by 10 percent and prices up by 6 percent nationwide, CNBC reports. But the heat won’t last once mortgage rates rise, says Redfin CEO Glenn Kelman.
Analysts expect the Federal Reserve will begin raising interest rates in September. Based on past trends, potential buyers pullback when there is a mortgage rate spike, like what happened in late 2013, when demand declined about 10 to 20 percent.
"We do not see consumers willing to pay that price when rates go up. We think there is going to be a step back as the money supply tightens," Kelman tells CNBC.
Advertisement
Related Stories
Economics
Housing Share of GDP in Q1 2024 Rises Above 16%
The increase marks the first time GDP has surpassed 16% since 2022
Economics
Shelter Costs Drive Inflation Higher Than Expected in January
January Consumer Price Index data show inflation increased more than anticipated as shelter costs continue to rise despite Federal Reserve policy tightening
Economics
Weighing the Effects of the Fed's and Treasury's Latest Announcements
The upshot of the Jan. 31 announcements is that while mortgage rates will stay higher for longer, they're likely to hold steady