Housing Market Rebound Potential: Logan Mohtashami on Rates, Inventory, and Buyers

Housing Market Trends and Data

• 📉 Existing home sales saw a sequential drop of about 6%, but recent weekly pending contracts and purchase application data show positive year-over-year and year-to-date trends.
• 💡 Even with elevated mortgage rates, the housing market is showing encouraging signs like growing inventory and cooling price growth.
• 🎯 A dip in mortgage rates towards 6% could lead to a significant rebound in sales this year, especially given the current low bar for comparison.

Market Health and Future Outlook

• ✅ Current market conditions, with a 20% year-over-year increase in existing home inventory and slowing price growth, are viewed as positive and healthy for the future housing market.
• ⚠️ This is a stark contrast to the unhealthy market of the COVID years, characterized by low inventory and accelerating price growth.
• 🏠 The current backdrop is considered better for housing, even if the economy enters a recession, compared to previous decades.

Buyer Demographics and Demand

• 📊 First-time buyers represent 32% of the market, historically lower than the 40% average, while investors remain steady at 15%.
• 🔑 Millennials and elder Gen Z are still actively buying homes, and their participation is expected to increase if mortgage rates move closer to 6%.
• 🚀 If rates decrease, millennials are predicted to recapture their ranking as the biggest home buyers in America.