Housing affordability has reached its point in 16 years as interest rates soar to the level, in two decades. The housing market is facing difficulties due to this decline in affordability and the high mortgage rates. During the quarter of 2023, California’s Housing Affordability Index dropped to 15% marking its level since the third quarter of 2007. This decline can be attributed to rising home prices, limited housing supply and elevated mortgage rates.
- The monthly mortgage payment for a home in California increased by 6.3% compared to the quarter and rose by 15.4% compared to the third quarter of 2022.
- In October 2023 consumer sentiment towards purchasing a home hit an all-time low with 15% of individuals considering it a time to buy.
- Expectations for holiday spending have decreased, with an average anticipated spending per person at $965.
- The number of seasonal holiday job opportunities advertised this autumn reached its point in ten years.
- Consumer expectations regarding inflation slightly improved in October with expectations for one year inflation decreasing from 3.7% to 3.6%.
Implications for Real Estate:
The combination of declining housing affordability and rising interest rates presents challenges, for prospective homebuyers looking to enter the property market. The current low level of enthusiasm, for buying homes suggests that consumers are not keen on entering the market due to conditions. If holiday spending continues to slow down it could have an impact on the real estate market as consumer confidence weakens. Additionally the decrease in demand for hiring implies a slowdown in job growth in the upcoming months which may also affect the real estate industry.
In light of these challenges seeking real estate coaching and mentorship can be extremely beneficial for agents and brokers. With coaches and mentors, by their side agents can navigate through the changing market conditions develop effective strategies and enhance their skills to thrive in this competitive environment. By investing in real estate coaching and mentorship agents position themselves to overcome obstacles and achieve their career goals.