The sluggish housing market is on track to finish the year at the slowest pace since the Great Recession. But that doesn’t mean no one’s buying.
Around 4.15 million previously-owned homes will be sold in 2023, the National Association of Realtors estimated in late October, which would be the lowest pace of sales since 2008.
What’s driving people to buy those 4 million plus homes? Robert Reffkin, founder and CEO of Compass
“There’s a lot of pent-up demand. You have the five D’s keeping the market moving,” Reffkin said in an appearance on CNBC.
“Diapers, diplomas, diamonds, divorce, [and] death,” he explained. “Those life events keep the market moving at this pace.”
The D’s represent phases in a home buyer’s life when they need to move to a larger home as their family expands, or to a smaller house as their household contracts.
But aside from those home buyers who have a pressing need to move, everyone else is on pause in this housing market, given how high home prices and mortgage rates are, he added.
“All the people that want to move, they’re really on pause… it’s the people that want to move, not [those] that have to move,” Reffkin said.
The share of consumers who think it’s a “bad time” to buy a home has risen to a record high, at 85%, according to a recent survey.
Returning the housing market to more affordable levels would require one of three things, ICE’s
People are waiting on the sidelines for one shoe to drop. And to that end, demand is “building up month over month,” Reffkin said.