Luxury real estate agent Katrina Campins claimed on Wednesday that “the stock market will be an indicator of what is happening in the real estate market.”
The stressed customers of the Campins Company founder have been affected by the stock market, which “has seeped into the real estate market.”
Markets have experienced volatility in recent months in the midst of the uncertain economic picture, as inflation is at a fresh high for 40 years and as the Federal Reserve has raised interest rates as a way of trying to curb price increases.
“Some people claim that the stock market is not doing well so they can invest in real estate, but in general it has a psychological effect, even on cash buyers,” Campins told Cavuto: Coast to Coast.
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“Sometimes my clients will say, ‘Well, I can still find a cash buyer.’ so liquid because their portfolio is not doing so well. “
Campins also noted that rising interest rates have caused a slowdown in the real estate market.
The interest rate-sensitive housing market has begun to cool noticeably in recent months as the Federal Reserve moves to tighten policy at the fastest pace in three decades. Politicians already approved a 75 basis point rate hike in June and are expected to approve another of that magnitude by the end of July.
After the interest rate hikes, the average interest rate on a 30-year fixed mortgage – the most popular among new homeowners – rose to almost 6% in June, although they have since moderated. The average interest rate on a 30-year fixed-rate mortgage hovered around 5.51% in the week ending July 14, according to the latest data from mortgage lender Freddie Mac.
The real estate expert provided the insight the same day it was revealed that sales of existing homes in the U.S. fell to a new low for two years in June as rising mortgage rates and the relentless rise in home values slowed activity by getting potential home buyers out of the market.
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Sales of previously owned homes fell 5.4% in June from the previous month to an annual rate of 5.12 million units, the lowest level since June 2020, according to new data released by the National Association of Realtors. This is the fifth month in a row that sales have fallen. On an annual basis, home sales fell by 14.2% in June.
The slowdown in sales came as the national median house price rose higher in June, hitting a new record of $ 416,000. This is an increase of 13.4% from the previous year and is an increase from a revised $ 408,400 in May.
The Campins Company founder Katrina Campins discusses the real estate market, noting that there has been a ‘slowdown’ as interest rates have been rising. (Greg Doherty / Getty Images / iStock)
Campins noted that there is still “very low supply.”
She added that “some buyers have gone back from the market and sellers are waiting for them to come back” because of the current market conditions.
“What we’re starting to see is, even with the rise in interest rates, that some people are now turning to an ARM or an adjustable rate loan, which is very different from what we’ve seen in recent years,” she explained. “It’s basically that you get an ARM for five to seven years. The rate does not change during that time period, and then it will adjust accordingly.”
“The reason for that, the old saying is, ‘You marry the house and date the price,’ so if you still find a house in this market that you love, you can always refinance later,” she continued.
There were about 1.26 million homes for sale at the end of June, according to the report released Wednesday, an increase of 2.4% from a year ago. It is the first annual gain in three years. With the current sales pace, it would take about three months to deplete the stock of existing homes – up from 2.6 months a year ago. Experts see a pace of six to seven months as a healthy level.
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Campins added that “some markets are doing better than others” and “we are starting to see more inventory, which is a good thing for buyers because we had such a low supply in the market.”
FOX Business’ Megan Henney contributed to this report.
