As the housing market enters the summer season, signs are pointing to a steady rise in available homes — a sign that competition in the housing market might be easing. But while demand is growing, rising home prices and high 7 percent mortgage rates make it difficult for many buyers to afford a home.
Because of this, buyers and agents are exploring alternative solutions like co-ownership, which grew nationwide by 21 percent year-over-year. And despite changing commission structures, Pacaso continues to support agents by paying a full 3 percent referral commission on the share price of any Pacaso home. Here are the top trends agents need to know about to continue earning in this fluctuating market.
1. Inventory (and demand) are steadily increasing
New listing volume is up more than 32 percent compared to last year, according to Altos Research. This upward trend is a departure from previous years when inventory was declining heading into the summer buying season.
With more homes to choose from, buyer demand and home transactions are anticipated to heat up in the coming months. According to the Mortgage Bankers Association (MBA) Builder Application Survey, mortgage applications increased 6.2 percent week-over-week for the week ending on May 3.
2. Seven-percent rates will be the norm
While mortgage rates relaxed slightly at the end of last year, rates have since consistently tracked above 7 percent. During the first week of May 2024, the average rate on a 30-year fixed-rate mortgage rate was 7.08 percent — which was, surprisingly, a one-month low. Aspiring homebuyers should expect rates to stay in this range through summer, with the hope of steadily declining rates in the latter half of the year.
At Pacaso, we offer co-owners competitive financing options. Currently, 50 percent of our “Available now” Pacaso homes are eligible for buyer financing at 5 percent or less with assumable mortgages.
3. Home prices show no signs of trending down
Despite a projected rise in inventory, the relatively low volume of homes for sale has impacted prices significantly. According to CoreLogic, home prices across the country experienced a year-over-year increase of 5.3 percent in March 2024, with a forecast of 3.7 percent for March 2025.
4. Housing affordability remains a challenge
Rising home prices will continue to place pressure on potential buyers. A recent Redfin report revealed that a typical household would need to earn $114,000 annually to afford a median-priced home — that’s 35 percent higher than the average U.S. household income. Homeownership affordability has hit its lowest level since the 1980s, driven by decades-high home prices and mortgage rates.
To navigate affordability, buyers are looking for innovative solutions like fractional ownership. Co-ownership increased by 21 percent year-over-year across the U.S., according to Pacaso’s inaugural Co-Ownership Growth Report. In response to evolving market dynamics, Pacaso has also expanded its listings nationwide to appeal to a broader audience, with listings now starting at $200,000.
5. Industry compensation is changing (but not at Pacaso)
Despite the ever-changing compensation changes in the real estate industry, Pacaso is committed to paying buyer’s agents referral commissions and helping them earn more business. Agents get paid a full 3 percent referral commission on the share price of any Pacaso home a client buys. Pacaso handles the legwork, including inspections and escrow and keeps agents in the loop at every step.
Learn more at https://www.pacaso.com/agents.