Could your next home purchase leave more money in your wallet? We’re pulling back the curtain on an explosive lawsuit that's rocking the real estate world and what it could mean for your bank account. As housing market data reveals a slowdown, with mortgage applications at a standstill and Google house searches dipping, this week’s episode dissects the ongoing affordability crisis and the silver lining of increased market inventory. Despite median house prices hitting the roof, the quick turnover of homes suggests the market is still hot – but don't ignore the uphill battle against today's steep interest rates.
The real tea, however, is the legal challenge to the National Association of Realtors (NAR) that might just flip the home-buying game on its head. Imagine a world where competition amongst realtors drives down commission rates, potentially changing the face of home purchases for everyone – especially cash-strapped millennials. But as we look closer, could this transparency in realtor fees make the quest for a quality agent tougher? Weighing the pros and cons, this episode is a must-listen for anyone with a stake in the real estate hustle or just curious about where the market is heading. So buckle up as we navigate the twists and turns of this industry-shaking lawsuit and what it could mean for the future of buying homes.
This episode is brought to you by Premier Ridge Capital.
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A lawsuit is shaking things up in the world of real estate, and it could mean more money in your pocket. Find out more in this week's Real Estate Market Update. But before that, let's take a look at this week's housing market data. The number of people applying for mortgages is still flat compared to last week and it's down 13% from what we saw last month. Google searches for houses are down 4% compared to last month.
Speaker 1:
Trying to buy a house these days is pretty rough. The median asking price is $376,223, which is basically the cost of your entire student loan collection plus some more. You might want to hold on to your savings, because the median house price just hit $404,925. Looks like some of us will be renting for a little bit longer. With a median monthly mortgage payment of $2,700 at a 6.7% interest rate, that's more like paying rent with extra steps. There are more houses on the market than last year. We're talking about 8.4% more, but guess what? They're probably still too high for most Americans' affordability and budget. There are 6.9% more houses on the market this year, but that doesn't mean we're getting any closer again to your budget, and homes are still selling faster these days. The median time on the market is only 39 days. That is a good sign that houses are selling faster.
Speaker 1:
The challenge we're having right now is, with these interest rates, with these prices, it's a combination for disaster, with the affordability challenges that we're facing Now. It's not that these interest rates are high, by the way, these interest rates are not high at all. When I bought my first house in the year 2000, I was paying a 9.75% interest rate. I was paying a 9.75% interest rate. The difference was that I bought a three-bedroom, two-bathroom house for $179,000, versus today that same house would be $400,000 at a 6% interest rate. It doesn't matter, the mortgage payment is going to be significantly higher. So that's the challenges at affordability. The prices of houses, along with these interest rates, makes it unaffordable. It's not just the interest rates. Hence why, if the American government and the feds want the American dream of homeownership to come back, they have to lower the interest rates so that the average working class American can afford to buy a home again.
Speaker 1:
And here's what you should be paying attention to what's happening in the world of real estate right now. We're talking about the challenge to the National Association of Realtors, the NAR group that basically sets the rules for buying and selling homes. The lawsuit states that NAR has been unfairly keeping commission rates high, which means you end up paying more when you buy a house. For those of you that don't know how that correlates, if I'm selling a house and the commission is 6%, what we try to do is we try to increase it a little bit so that the house pays for the commission, because I have to pay for that 6% to both the buyer and the selling agent. So if the house is $100,000, let's just say I'm going to try to get $106,000 or $107,000 so that I can net my $100,000, if that makes any sense.
Speaker 1:
Here's the juicy part about this lawsuit. Okay, guys, if the lawsuit wins, brokers won't have to show how much they charge buyers up front. This could lead to more competition amongst realtors, which could drive down prices. Basically, it would be like getting into a bidding war, but instead of fighting over the house, you'd be fighting for the best realtor deal. Sounds pretty sweet, right? But hold on a sec, there's a twist. Some experts worry that if realtors don't have to show their prices up front, it could be harder to find a good one to help you buy a house. So the whole thing might turn into a bit of a gamble. The lawsuit is a big deal for millennials and other younger people in our country looking to buy a house. It could potentially save you money, but there could also be some downsides. So stay tuned on how this plays out here in the future. And this has been your weekly real estate market update. I'll see you guys next week. Peace.