Record numbers are emerging in the US real estate sector, with sellers exceeding buyers by 57.9% in August, marking the largest discrepancy since Redfin began tracking data in 2013.
It appears that the market is saturated with listings, yet many homes remain unsold. Redfin estimates that there are approximately 972,300 active homebuyers in the market.
The Buyer Dilemma in America
In August, Redfin reported 1.53 million sellers, the highest figure since early 2020. There was a monthly increase of 3.9% in listings. Meanwhile, the number of buyers rose a mere 0.1% from July, which was the lowest point in the recorded series.
While supply is improving, demand continues to remain at historically low levels.
“With an influx of sellers and stagnant demand, current house hunters have a significant advantage in their choices,” stated Redfin senior economist Asad Khan.
The divide is stark in the Sun Belt. Nashville reported 139% more sellers than buyers, followed closely by Miami at 138% and Houston at 131%.
Conversely, San Francisco is experiencing an upward shift, standing out as one of only five seller’s markets, benefiting from reduced inventory and affluence from the AI boom.
This disparity is impacting home prices, with properties in seller’s markets appreciating by 5.5% year-over-year in August, while buyer’s markets saw only a modest 1.6% increase.
Implications for the Market
The current housing situation highlights the effects of high interest rates on the US economy.
At present, the average rate for a 30-year mortgage stands at 6.76%. This is leading to a drastic drop in potential buyers in one of the nation’s most interest-sensitive markets.
If this trend continues, it could negatively affect various sectors including construction, household spending, and ultimately corporate profits.
This situation creates challenges for the stock market, as housing has historically been a significant channel through which monetary policy impacts the broader economy.
A decline in home prices is not necessary for these pressures to influence the market; prolonged weak activity alone can suffice.
Bitcoin is experiencing similar macroeconomic challenges. Rising Treasury yields limit liquidity and diminish the appeal of riskier assets. Research from the IMF indicates that stricter US monetary policies tend to negatively affect both cryptocurrency and equity markets.
However, there is a silver lining. A significant downturn in the housing market could lead to lower yields and support a shift towards more accommodative monetary policies, thereby enhancing liquidity for both stocks and Bitcoin.
Thus, while the current seller surplus does not indicate an imminent crash, it does provide insights into the long-term housing cycle: if the market begins to shift, the pressing question is whether the decline will be contained.
Read the original article US Housing Market Is Breaking. Will It Impact Stocks and Bitcoin Prices? by Jakub Dziadkowiec at beincrypto.com