29 June 2023
A potential flood of housing inventory looms as mortgage rates drop, causing concerns for the market, according to Compass CEO Robert Reffkin. With the majority of homeowners holding onto low mortgage rates, inventory remains tight. However, if rates reach a sustainable level of 5% to 5.5%, Reffkin expects a surge in inventory reminiscent of the pandemic era. The current average 30-year fixed mortgage rate stands at 6.67%, near a 20-year high. Experts predict little relief in mortgage rates as the Federal Reserve’s monetary policy continues to influence borrowing costs. The possibility of further rate hikes adds to the pessimism, with markets already factoring in an 82% chance of a rate increase at the next policy meeting.