With such a backdrop, treasury yields are rising as well as borrowing costs for the end consumers thus creating a vicious circle for the housing market, which seemingly went soft overnight. In the meantime, CEO of Redfin Corp (NASDAQ: RDFN) Glenn Kelman, speaking with CNBC’s “Squawk on the street”, weighed in on the state of the housing market and announced layoffs of 8% of the workforce in his company.
May housing demand down
Equally important, the housing data for May came in lower than expected, dropping by 14.4%, and with a rise in interest rate, it doesn’t seem likely that the demand will spring back up as quickly. On the other hand, Kelman believes that the change has not been cataclysmic and that the demand could soon return. He also added:
Price increases
The median home price has risen over 44% in just two years, moving above the $400,000 mark. Comparably, home sales are plummeting reaching the 2020 lows, falling over 9% year-over-year (YoY). Overall, it seems as if the housing market will depend on whether consumers can ride out the inflationary pressures, rising interest rates, and a worrying macroeconomic outlook to start rebuying homes again. Based on these inputs, investors could expect more volatility in the housing market and with homebuilder stocks. Buy stocks now with Interactive Broker – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
