The 30-Year fixed mortgage rate is quickly approaching 8% for many potential home buyers. Meanwhile, prices for new homes continue to rise, and inventory remains low, making both new and existing home owners reluctant to buy. According to the National Association of Realtors (NAR) existing-home sales dropped 15% in September on a year-over-year basis. This provides a miserable mix for the housing market that makes many believe the market has entered an early winter.
David Mericle, Goldman Sachs Chief US Economist in Global Investment Research, joins Yahoo Finance to break down the impact all of this has on the housing market and what it will look like in the near term.
Mericle puts the current status of the market into perspective: “Affordability has diminished substantially. First prices rose a lot, then mortgage rates rose a lot, it costs an awful lot more to finance under-occupied housing than it did several years ago but, because of the supply shortage, I think the demand is still there for the market to clear at prices similar to where we are.”
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
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