Netflix (NFLX) In the hit reality series Selling Sunset, star real estate broker Jason Oppenheim leads a team of charming agents to sell homes to Los Angeles’ elite.
But with interest rates rising, the consumer elite and others are reluctant to buy (and sell) homes.Recently, the National Association of Realtors report U.S. existing home sales were 5.03 million last year, down 17.8% from 2021 and the worst year for home sales since 2014.
Yahoo Finance’s Allie Garfinkle recently sat down with Oppenheim to discuss the current housing market and whether now is the time to buy.
Verdict: Maybe so, but it’s complicated.
“I am generally optimistic because the market may have bottomed out at the end of 2022 and interest rates may have spiked at the end of 2022,” Oppenheim said. “But I don’t want to pretend that it means the property market is going up.
30 year fixed rate mortgage Last weekend was around 6.15%This compares to about 3.5% a year ago.
Oppenheimer said higher interest rates would affect everyone, but would hit low-income buyers harder. “Interest rates are mostly across the income bracket, but I think it affects the lower income bracket….People talk about affordability of housing.So it’s the down payment. Down payment. It’s always It was difficult. But now, not only do you have a down payment, but now you have to pay 5% or 6% interest even on a 5 or 10 year fixed.
Nonetheless, Oppenheim is optimistic about where interest rates will land in the next few years, and thinks incredibly high interest rates are unlikely to persist for long.
“In my opinion [rates] “Interest rates will go down in the next few years.”
But at the moment, buying is not the one-size-fits-all answer
Oppenheim added that buyers can always refinance several years into a mortgage deal. He also mentioned the benefits of owning a home instead of renting it for the long term.
“Buying is always better than renting if you can keep the property, you can survive the ups and downs, and you can take advantage of the valuation over 10, 20, preferably 30 years. In that case, buying always makes sense. I think you are,” he said.
Still, Oppenheim said buying doesn’t necessarily make sense in the short term.
“There are transaction costs and restricted mobility for owners,” he said. “You have a lot of hassle. It’s no longer the landlord’s fault when it comes to a leaky roof. It’s your problem now. So if you’re only going to own it for a few years, maybe you should consider renting.” please. .”
The emergence of COVID-19 and remote work has pushed people away from major cities and changed the home buying landscape in these cities, he added. Nearly 70% of his metropolitan areas have lost their population in 2021, although some cities are seeing recovery. According to a recent report by the Economic Innovation Group (EIG).
“I don’t have to live in Los Angeles. I don’t have to live in San Francisco. I don’t have to live in New York. Now I can live in other cities,” he said. “If we can’t address some of these macro issues, I think we’re going to be pulled away from some of the big cities.”
Dylan Croll is a reporter and researcher at Yahoo Finance. Follow him on Twitter. @CrollonPatrol.