According to a monthly report from Alignable, 45% of real estate agents who own their firms stated that they’re struggling to pay their offices rent in the month of November. This is a 5% increase from October, and 10% higher than September’s data, citing a consistent increase.
This data aligns with the attitudes of US homeowners as of late, as many who are wanting to move are currently waiting for the market to improve and constant high housing costs to decrease. Overall inventory for homes on sale is also the lowest it’s been in a very long time.
Corey Burr, the senior vice president at TTR Sotheby’s International Realty, stated that these recent reports aren’t actually surprising. He discussed how recent interest rate hikes have been driving up mortgage rates and bringing home sales to a lull.
“I think that the Federal Reserve has put us in this spot where they essentially froze up the residential real estate market by holding interest rates low for so long, and then increasing them so much so quickly. It’s created incredible distortions in our marketplace.” Burr says.
Burr also discussed that he’s been in the real estate industry for over 36 years, so he’s very experienced in following the ups and downs of the real estate market when you own a small business.
“We are in a spot in the real estate cycle that is hardest for brokerages, particularly the smaller ones who have less market share, and who have fewer assets than the larger brokerages to ride out the storm,” Burr says.
Prospective buyers are paying close attention to the market as well. High mortgage rates combined with an increase in buyers backing out of deals have led to a major decline in sales.
Last month, pending home sales were down by 1.5% from September and 8.5% from last year, which is the lowest pending-sales figures according to the National Association of Realtors.
Burr also mentioned that he expects the amount of realtors to decline across North America as the market continues to struggle, citing that over 60,000 agents left the industry in the first six months of the year.
Some real estate data analysts are predicting that mortgage rates should decline within the next year. The National Association of Realtors economist Lawrence Yun predicted in early November that mortgage rates could reach between 6% to 7% by next spring and home sales could increase by 13.5% in 2024.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at firstname.lastname@example.org.