The Campins Company founder stressed clients have been impacted by the stock market, which, “has trickled down into the real estate market.”
Markets have experienced volatility in recent months amid the uncertain economic picture as inflation sits at a fresh 40-year high and as the Federal Reserve has been raising rates as a way to try to curb the price spikes.
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“Some people argue that the stock market is not doing well so they can invest in real estate, but overall it does have a psychological effect even on cash buyers,” Campins told “Cavuto: Coast to Coast.”
“Sometimes my clients will say, ‘Well, I can still find a cash buyer.’ Yes, but, they are affected by the stock market and they are affected by interest rates going up even if it is psychological and they may not be as liquid because their portfolio is not doing as well.”
Campins also noted that rising interest rates have caused a slowdown in real estate market.
The interest rate-sensitive housing market has started to cool noticeably in recent months as the Federal Reserve moves to tighten policy at the fastest pace in three decades. Policymakers already approved a 75-basis point rate increase in June and are expected to approve another of that magnitude at the end of July.
Following the rate hikes, the average rate on a 30-year fixed mortgage – the most popular among new homeowners – climbed to nearly 6% in June, though they’ve since moderated. The average rate for a 30-year fixed rate mortgage hovered around 5.51% for the week ending July 14, according to recent data from mortgage lender Freddie Mac.
The real estate expert provided the insight on the same day it was revealed that U.S. existing home sales dropped to a fresh two-year low in June as rising mortgage rates and the relentless increase in home values slowed activity by edging prospective homebuyers out of the market.
Sales of previously owned homes tumbled 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. It marks the fifth consecutive month that sales have declined. On an annual basis, home sales plunged 14.2% in June.
The slowdown in sales came as the national median home price surged higher in June, hitting a new record of $416,000. That’s up 13.4% from the previous year and is an increase from a revised $408,400 in May.
Campins noted that there is still is “very low supply.”
She added that “some buyers have regressed out of the market and sellers are waiting for them to come back in” due to the current market conditions.
“What we’re beginning to see is even with the rise in interest rates, some people are now turning to an ARM or an adjustable-rate mortgage, which is very different than what we’ve seen in recent years,” she explained. “That is basically you get an ARM for five to seven years. The rate doesn’t change during that time and then it will adjust after that.”
“The reason for that, the old saying is, ‘You marry the house and date the rate,’ so if you still find a house in this market that you love, you can always refinance later on,” 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 one year ago. It is the first annual gain in three years. At the current pace of sales, it would take roughly three months to exhaust the inventory of existing homes – up from 2.6 months one year ago. Experts view a pace of six to seven months as a healthy level.
Campins added that “some markets are doing better than others” and “we are beginning to see more inventory, which is a good thing for buyers because we had such a low amount of supply in the market.”