Housing market remains BLEAK as high mortgage rates and low inventory persist

Added: 2026-05-07

[00:00:02]So the spring housing market heating up, but the latest data still looks pretty bleak. We've got some new figures from the National Association of Realtors showing that existing home sales fell 3.6% from February going into March.

[00:00:15]Lack of inventory pushing the median existing home price to a record 408,800 nationally. If you're a buyer, hey, congratulations.

[00:00:23]And the average on a 30-year fixed-rate mortgage, the most popular in this country, it is still sitting above 6.6% 6.2% about right now. So my next guest says that buyers are trying to embrace the reality that these rates are basically here to stay. Joining me now is Bess Freedman, she's the CEO of Brown Harris Stevens. Great to see you. So great to see you, Sheryl.

[00:00:43]>> talk about the national picture here because, you know, we're still in a a holding pattern right now, if you will. What are you seeing out there?

[00:00:51]>> Well, I think you as you alluded to, I think, in the last segment, a lot of sellers still have this very low rate, so they're not willing to sell. And we still need about 5 million homes in the marketplace. There's a real lack of supply just nationally. And so buyers and sellers have sort of been on the sidelines. We're seeing a little bit more action, but you know, rates are probably going to stay around, I think, 6%. Your guest before talked about going down to 3%. I don't see what the catalyst for something like that is.

[00:01:22]Well, how do you if you're a buyer, you're waiting for rates, you were waiting for rates to go below 6%. You're saying now they're accepting it, you know, they're not going to wait any longer. But what about the price pressure on the other side of this? I mean, we are seeing some more movement in the in the market this spring. It's better than it was last year.

[00:01:39]>> I think it's going to be slow and steady. And look, buyers are there to see opportunities. When they see something that looks good, they're going to negotiate, they'll put an offer in if it's the right home. It won't matter so much the rate if they can afford it. So I think people have sort of accepted that 6% is the new rate.

[00:01:55]>> Well, starts did jump to a 13-month high in March. You say that obviously inventory is still a big challenge. Is inventory an issue in certain cities and not in others? Like where are we seeing more movement right now?

[00:02:08]>> New York City, for example, we have ample inventory, it's steady, and there's good sort of supply and demand.

[00:02:14]Okay.

[00:02:14]>> But I will say this, that I'm sure you've heard about the recent potential pied-à-terre tax.

[00:02:19]>> Yeah, I was going to ask you about that, yeah. So, you know, that's scaring the market a little bit. You know, New York City is very discretionary, and we have buyers, agents have come into my office and talked to me about it. The buyers are sort of on the sidelines right now. They're worried about this tax and what it would mean.

[00:02:36]It would be every year, what the amount would be. I mean, Vancouver passed a tax like this, and it the luxury market has plummeted there. 17% it went down. And if Governor Hochul wants people to come back from Florida, this is the worst thing to do. People are not going to come back for this.

[00:02:53]>> Well, to be clear, let our viewers know, you you specialize in New York and then also in Florida, that's that luxury market. So let's talk about this because with this pied-à-terre tax, I mean, this is this is going to affect maybe about 13,000 residences in New York City if it's valued at 5 million or more, and the person that owns it is not a a, you know, permanent resident or a a full-time New York City resident. You know, full-time. They're not a full They're not a full-time Understood. So but how does it but I would I would think though that politically that this this is probably going to head through. I think so. I mean, look, it's a feel-good tax, you know, for the governor and for the mayor, and they need to get their sort of budget in order. But they This was They attempted to pass this. Governor Cuomo at the time talked about this when he was the governor, and they didn't pass it because it's hard to administer, and, you know, it's also hard to identify who these people are and how much money would really raise. We have questions about it being 500 million. I don't think it would raise anywhere near that.

[00:03:55]Plus, the mansion and transfer tax every year brings in about over 1 billion dollars. So what's going to happen to that if people aren't buying and selling?

[00:04:03]>> What do you make of Ken Griffin from Citadel? He actually today meeting with Hochul, we know that. We don't know we haven't heard anything about the meeting, maybe it hasn't happened today.

[00:04:12]But at the same time, I mean, that's that is somebody with a very powerful voice. He is about to build a multi-billion dollar tower. He may say, "I'm walking away." Yeah, I could. It's possible.

[00:04:23]>> understand this politics. Look, I don't care what flag you wave, we need good policies. And people who are aspirational like a Ken Griffin, we shouldn't mock. I think it was very mature of the mayor to sort of make, you know, jokes about it or about what what he's achieved. That's aspirational. New Yorkers love that. And so he's also donated millions to Sloan Kettering, he's created jobs.

[00:04:46]>> Yes. He's a person we want in New York City. And so I think the job of leadership in politics is to unite people, not divide the haves and the have-nots. We want people to come together.

[00:04:57]>> Well, that's the mayor of New York City, which is a whole another story. But let me stay with this really quick because our own Greta Thunberg today has been reporting on this shift to with with commercial real estate. Basically, major cities, whether it's Chicago or New York, there's this move now to take these office buildings, which many of them have been vacated since the pandemic, shift them into apartments.

[00:05:17]It's not an easy thing to do with construction projects like this, but it is being done.

[00:05:22]>> Yeah, there is some of that happening. I mean, Mayor Adams, when he was the mayor, was advocating for this, and there's a push for that in New York, and some of those conversions are happening.

[00:05:31]It's harder to do because of the core and how commercial is built and light and so many different things. But where we can, we definitely should push for that.

[00:05:40]>> Well, and also, too, I think at the end of the day, if you've got all this empty space, I realize you're going to have to, you know, knock out walls and make windows and and plumbing and things like that. But the end result could be a new imagined urban environment, you know, for I mean, it's 10 years out, but you could have a residential New York City, you could have a residential Chicago.

[00:06:01]>> We need more supply. I mean, that's clear. We We need policies that get us more supply into the market. So anything like this would be good. It's just harder to do than what people say.

[00:06:11]>> Well, also, too, it brings in restaurants and dry cleaners and grocery stores, all the things that you want to have >> which we need >> successful city, Bess.

[00:06:19]>> Like New York.

[00:06:20]>> Yeah, yeah. Always good to talk to you, Bess.

[00:06:22]>> Sheryl. Thanks for having me.

[00:06:23]>> in. All right.