What's New With Housing

📆This Week’s Topic

This week, we’ll be talking about housing, more specifically mortgage rates, and buying homes. With houses being expensive as ever and mortgage rates rising as well, creative solutions are needed to find a home. But there are also problems with buying and selling, due to the current state of the market, and conflicting feelings for consumers.

💳 Cause & Effect

During the pandemic, mortgage rates dropped to around 2-3%, so many people looking to purchase a house jumped on the opportunity to lock in a low rate. In the current day, those rates have risen to 7%, a tactic used by the Federal Reserve Bank to combat inflation. Many home-buyers feel stuck now, due to the high rates. And if they would look to buy a house, there aren’t many on the market, as sellers are removing listings rather than lower costs for houses, essentially bringing the housing market to a standstill.

📊 Statistics

Around 25% of homeowners who bought a home during the pandemic regret buying that same house that seemed so appealing back then. 40% of millennials have postponed other aspects of their life due to underestimating the costs of housing or due to life changes, such as partners or kids. A Realtor.com and HarrisX survey said that, as of 2023, around 80% of homeowners felt locked in by the market, and couldn’t justify leaving their house and low mortgage rates for one that was double, or more.

🔚 Outcome

The main problem is houses that are too expensive, or have unjustifiable rates. But two teens in New York have created a solution, that if mirrored across the US, could vastly help the problem at hand. Beckett Zahedi and Derrick Webster Jr., two highschoolers in Brooklyn have created a website that’s purpose seems like the perfect fix for the larger problem with the housing market.

⛱ Consumer Effect

Zahedi and Webster. Jr’s website, called Realer Estate, is a website that helps buyers find affordable prices by combining public data with real estate listings. What it does is search for affordable apartments with stable rent, allowing people to find home they can buy and stay in. Zahedi’s YouTube-taught algorithm scans addresses and compares them with other properties to calculate the affordability. Given not everyone in the US lives in an apartment, but if used with houses as well, this could be a tool used by the general housing population. It could very well be a tool that could greatly help Americans, something it has already started to do on a smaller scale in New York.

🏢Business Effect

Realer Estate has gained attention, too. They’ve received over 25,000 dollars of “supervised” funds to aid them as they grow their website, which will hopefully help them expand their domain, allowing them to help people all over the US. So where people are struggling to move or stay in new homes, creative, entrepreneurial solutions such as Realer Estate can aid them in their search, and be one solution for the housing market many feel has “locked them in.”

⏳ Final Summary

In all, interest rates are high, the housing market is locked in, and it’s hard for people to buy or sell properties. But if time, effort, and money, are invested into solutions, the problem can be helped or even solved now, and again if it arises in the future.

🙏Thank You & Important Information

As always, thank you for reading this edition of Friday Finance. If you enjoyed this article, consider sharing it to a friend. And if you’re not subscribed, feel free to do so. Again, we are grateful for your readership, and see you next week.

Best,

Grayson Stein and Jacob Gans

Friday Finance