The housing market is still in a tough spot, but a closer look shows that there are a few reason now is a good time to buy, Compass’ CEO said this week
Robert Reffkin, the co-founder and CEO of the real estate brokerage, said the current conditions are creating a good opportunity for prospective buyers.
Speaking to CNBC this week, he said he sees three reasons the housing market is in a more favorable spot.
1. Inventory is climbing
Housing inventory is hovering at the highest level in five years. Total active listings in the US climbed to over 959,000 in April, according to Realtor.com data, the most inventory recorded since the end of 2020.
That should give buyers more options, and potentially weigh on home prices if the supply outweighs demand.
Currently, there are around 34% more sellers in the market than buyers — the most that sellers have outnumbered buyers since 2013, according to a recent Redfin analysis. The real estate listings site said recently that 31 out of the top 50 housing metros in the US are “buyer’s markets.”
“Moreover, with housing inventory levels reaching five-year highs, home buyers in nearly every region of the country are in a better position to negotiate more favorable terms,” Lawrence Yun, the chief economist of the National Association of Realtors, said on Thursday.
“But overall, it’s a better time to be a buyer than it was last year. You can’t buy what’s not for sale, and there’s a lot more for sale,” Reffkin said.
2. Home prices are down and could fall slightly
Homes prices are slightly lower than they were in 2022. The median sales price of a US home ticked lower to $416,900 in the first quarter. That’s down 5% from the median price tag of a US home sold in the fourth quarter of 2022.
Reffkin said he thinks it’s more likely that home prices will fall slightly in the second half of 2025, though he expects them to remain relatively flat through the year.
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But, when considering the pace of inflation, that’s still making housing more affordable for buyers.
“But recognize, flat is actually down in real terms. Because if inflation is up 3% and you’re flat, you’re actually down,” he said.
Redfin said it anticipated home prices to fall 1% by the end of the year. Zillow said it expected home prices to fall by 1.4%.
3. Mortgage rates have edged down
Borrowing costs have also inched lower. The average 30-year fixed mortgage rate clocked in at 6.89% the last week, according to Freddie Mac data.
That’s higher than where mortgage rates averaged during the pandemic, but borrowing costs are lower than their highs at the start of the year, when the 30-year fixed rate broke through 7%.
Pending home sales dropped 6.3% in April from the prior month, according to the National Association of Realtors.
Reffkin said he expected pending sales to rebound in May, with positive sales year-over-year. That’s partly due to fear surrounding tariffs starting to ebb, he said, which is boosting consumer sentiment.
“The less noise in the stock market, the less noise in tariffs, the more people feel comfortable making the most important purchase they make in their lives,” he said.
