Dropping mortgage rates creating more demand: CENTURY 21 Real Estate CEO
CENTURY 21 Real Estate CEO Mike Miedler discusses the impact of mortgages rate on the housing market, arguing affordability is still the biggest issue.
As consumers patiently wait for mortgage rates to settle, the Century 21 Real Estate CEO is flagging consumers about "positive signs" that are emerging from the real estate market.
"On the housing front, I think there are a couple of good, positive signs that are building momentum," Mike Miedler began.
"This decade-long run up in price appreciation, which we've seen certainly double-digit price appreciation over the last four years, is starting to settle in a little bit. I think we'll end the year anywhere from flat to 2% or 3% increase year-over-year," the CEO explained.
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A Century 21 Real Estate LLC "For Sale" sign hangs in front of a property in the Park Slope neighborhood of the Brooklyn borough of New York, U.S., on Tuesday, Sept. 17, 2013. Photographer: Craig Warga/Bloomberg via Getty Images (Getty Images / Getty Images)
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Miedler continued to break down some additional "good news" for the real estate market and its impact on investors' economic outlook.
"The mortgage rates, even though they have come down just a little bit, they are creating more demand," he said, Tuesday.
Pictured above is an illustration of the weekly average for the U.S.'s 30-year fixed mortgage rate as of December 5, 2024, according to Freddie Mac. (Fox News / Fox News)
Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage dropped to 6.69% — the lowest since October — from last week's reading of 6.81%. The average rate on a 30-year loan was 7.03% a year ago.
"Week-over-week, we're up about 3% in purchase applications. And wow, that's four consecutive weeks in a row. And believe it or not, you know where we were last year, but it's about a 50% increase from November 2023," the Century 21 CEO argued.
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As the affordability crisis continues to drag on, a spike in purchasing applications could point to some demand finally being relieved.
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The Century 21 CEO also broke down the impact that the Federal Reserve's rate cuts have had on the housing market.
"We've seen the Fed start cutting in September. What that turned into was units across the country lifting and increasing [for the] first time year-over-year in October, increase in units since 2021," he argued.
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Miedler concluded by revealing what he believes to be the "biggest issue" that is driving rates.
"I think we're seeing some positive signs," he said. "Affordability is still the biggest issue, and that's obviously mainly a driver of rates."
Gxstocks' Breck Dumas contributed to this report.
