Compass CEO Warns Housing Market Is Splitting by Geography and Price Point
In an interview on CNBC's 'Squawk on the Street,' Compass CEO Robert Reffkin warned that the U.S. housing market is becoming increasingly fragmented, with 42% of homes seeing price cuts in September—the highest share in nearly a decade. He noted significant differences between lower-end and luxury home markets, where sales for properties priced under $250,000 have dropped by 10%, while those above $1 million are up 4%. This divergence is attributed to varying buyer sensitivity to mortgage rates. Reffkin also highlighted that national housing supply has increased by 4% and expects mortgage rates to reach 7% by year-end. Despite a slight decline in overall transactions, home prices have risen 1.6% year-over-year despite higher interest rates. Price cuts are most concentrated in areas like Colorado and Texas, particularly Austin, which saw an influx of California buyers during the pandemic. Mortgage rates have already climbed close to 7%, with some analysts warning that Treasury yields could rise further due to growing national debt.
Tickers: $COMP
Topics: Geographic trends Housing market Mortgage rates Price cuts