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Homes Sales Climb Again: Tim Rood on Yahoo!Finance

More upbeat signs for the housing market as new home sales climbed for the third month in a row, up 2.3% in December 2022 to 616,000 units. Tim Rood, SitusAMC Head of Industry Relations, spoke with Yahoo!Finance on Jan. 26 about the factors that will likely drive the housing market in the coming months.

“The new home market clearly is dovetailing with interest rates, which have fallen about a percentage point over the last four months,” Rood said. “So a lot of people were on the sidelines, a lot of people looking over the fence waiting for the opportunity to get into this market. And this drop in interest rates has really given them that the opportunity.” 

But will the estimated 90% of homeowners locked in at an interest rate in the 3% range be willing to put their properties on the market, and take on more expensive mortgages?

“There's both the financial and psychological barrier to actually doing that,” Rood said. As a result, the market is seeing more homeowners in higher-priced coastal areas selling, migrating to more affordable cities, and paying cash. “About 30% of purchases right now are done with cash, about 10% higher than it had been historically. It doesn't bode well for the first-time homebuyers who have to compete with those all-cash offers.”

Click on the video above to hear Tim’s insights on the hottest geographic markets, the outlook for homebuilders’ stocks, and the federal government’s “cognitive dissonance” when it comes to housing supply and demand.