What Housing Might Look Like For The Remainder Of 2024
In this episode of the Mortgage Heroes podcast, Andy and Memo discuss the latest market trends affecting housing and real estate as we approach the end of 2024 and gear up for a pivotal election.
Housing Affordability as a Unifying Issue
Housing affordability is not just a swing-state concern but a national issue, cutting across political divides. While politicians from both major parties acknowledge the crisis, practical solutions remain elusive.
Despite promises, solutions like down payment assistance and tax incentives may not be enough to address the real problem of housing affordability and inventory shortages. Memo argues that broad federal policies may face challenges at the local level, leading to delays or ineffective outcomes.
Government Involvement in Housing
Andy and Memo deliberate on whether expanding government programs, such as tax credits for builders or down payment assistance, truly benefit the housing market. Memo mentioned that while government support can incentivize building, the complexities of local government regulations often lead to inconsistencies.
The duo shared skepticism about broad federal solutions and emphasizes the need for market-driven strategies that allow builders to adapt based on regional needs.
Election's Influence on the Market
With the upcoming election only days away, Andy notes that market behavior might shift based on the results. This pivotal moment could set the stage for significant changes in housing policies and economic direction.
Historical Comparison: Memo recalls previous elections and how uncertainty impacts housing, arguing that this year's stakes feel higher than in 2016 or even 2020.
Rising Mortgage Rates and Buyer Behavior
Mortgage rates continue to rise, impacting market activity. Memo and Andy highlight that while higher rates have subdued the market, they haven't eliminated demand. People who need to buy or sell still do so based on necessity.
Andy points out a shift in down payment trends, where buyers are opting for lower down payments to keep more cash in reserve due to economic uncertainty.
Builders Shifting to Condos and Townhomes
Construction of condos and townhomes is on the rise, particularly in land-locked areas like San Diego. The market is evolving to meet the demands of first-time buyers who seek more affordable options.
While attached housing might be a temporary solution to affordability, both hosts agree it’s not a sustainable long-term fix due to land constraints and growing populations.
While government policies and builder trends address parts of the problem, the real estate market continues to require flexibility and innovative solutions. Buyers and sellers alike must adapt to the evolving landscape, and the upcoming election may be a pivotal moment for shaping future housing policies.
Memo’s Highlight: Seeing bipartisan acknowledgment of the housing crisis gives hope for collective action.
Andy’s Insight: The changing approach to down payments indicates a shift in how younger buyers view home ownership.
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