Housing inventory will flood the market once mortgage rates fall: Compass CEO

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A flood of housing inventory will hit the market once mortgage rates hit this key level, Compass CEO says

A flood of housing inventory could hit the market if mortgage rates drop to a key level, according to Compass CEO Robert Reffkin.

For now, inventory remains tight as 70% of homeowners are locked into mortgage rates below 4%, he told"The issue we are seeing is that we need to have an unlock of inventory. It's probably going to happen when mortgage rates get to 5, 5.5% in a sustainable level. At that point, I would expect there to be a flood of inventory in the market, and it'll feel like the pandemic craze all over again," Reffkin said.this week, still hovering close to a 20-year high.

Because many homeowners are looking to cling onto the lower rates at which they financed their home years ago, demand has far outstripped supply, Reffkin said, with more homebuyers now opting to purchase newly constructed homes instead of

 

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