Redfin CEO says housing market is in a 'funk' as homebuyers weigh election uncertainty
According to one housing expert, the U.S. real estate market could be headed for a troubling turn.
Redfin CEO Glenn Kelman revealed what he believes to be the "real issue" that is paralyzing potential homebuyers during an appearance on "Cavuto: Coast to Coast."
"Housing is just in a funk. Even though interest rates have dropped 20 to 30 basis points over the past few weeks, we've seen homebuyers still on the sidelines," Kelman explained during "Cavuto: Coast to Coast," on Wednesday.
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Despite the recent economic hardships homebuyers have faced, Kelman predicted that the United States' critical presidential election is the real issue why buyers are being shelved.
"The real issue might just be the election. We've talked to so many homebuyers who say they're going to wait to see what happens in this election. It is gripping the national psyche, as you may have heard."
Kelman continued, noting that inventory and affordability have become an additional economic obstacle within the real estate market.
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"Inventory is going to remain very low for a long time, just because people who got a 3% rate aren't going to give up that loan, as you suggested. So we know that is the state of play. But even within that context, I think affordability is really a problem," Kelmann told FOX Business' Neil Cavuto.
"About two thirds of listings right now are still on the market. Nearly half those listings are contemplating a price cut or have cut their price. So we do expect there to be some relief, but it might not be enough. People are really struggling to get into housing, just because incomes have not kept up with prices."
"Until America builds more housing over the next 5 or 10 years, we might be in a low sales volume market. Maybe the election will make a difference, just because people can get back to the basic activities of commerce. But I think that housing is just going to be at low volume for a little while now," Kelman said.
Cavuto asked the real estate expert if it will "make a difference" who is in the White House in 2025.
"I think that different people have different beliefs around which president will be best for the economy. Obviously, we have to get the deficit under control. Part of what's driving interest rates up is inflation. But mostly that's been tamed," Kelman clarified.
"The real issue is that the government is borrowing so much money. And so the Republicans want to cut spending, the Democrats want to raise taxes. We probably need to do a little bit of both. And that's going to be the biggest factor on the housing market. Can we get the deficit under control? Can we make sure we have a clamp on inflation? Can the Fed do its job without a lot of political pressure?" the Redfin CEO concluded.