Why It’s So Hard to Buy or Sell a House Right Now

0:00Today's episode is brought to you by ChatGPT for Business. As a listener of this podcast, you're looking for ways to help teams move faster, make sharper decisions, and turn scattered context into work they can use. ChatGPT for Business can help. ChatGPT for Business gives teams a shared workspace with admin controls, permissions, and access to work and codecs in ChatGPT. This means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for work. Download the ChatGPT desktop app or contact sales to learn more.

0:37When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, that isn't always easy. Risk can touch multiple parts of an organization at the same time, often in ways that aren't immediately obvious. It might involve property, liability, or cyber. It could stem from regulatory requirements or challenges tied to a specific industry or the scale of an operation. At that level, managing risk becomes an ongoing discipline, not a one-time decision. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive.

1:11That means working with companies to identify where they're exposed, decide what matters most, and put practical standards in place so risk is managed as part of day-to-day operations. And when losses do happen, the Hartford can pair that risk control work with insurance coverage grounded in underwriting, risk engineering, and claims experience developed over time. Learn more at thehartford.com slash risk mitigation. As industries evolve faster than ever, companies need an environment that accelerates strategic growth. And Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance.

1:56With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org.

2:15How would you describe the state of the housing market in your city right now in one word? In one word? Nuanced. Good and bad. Weird. Those were the voices of real estate agents I talked to in a few major U.S. cities. And while there's no single perfect word to capture the vibe of the housing market this past season, the data itself is clear. This spring, across the board, people aren't buying and selling as much as they normally do. I think spring was just a time of turmoil. Colin Wainwright is a real estate broker in Nashville, Tennessee. So what we ended up seeing is a little bit of a freeze, a little bit of flattening out.

2:57A lot of buyers are still feeling locked out. April through June is usually the busiest time for the real estate industry. when the school year is ending and families are itching to move before everything starts back up again in the fall. But this May, the number of Nashville homes sold was down 16 percent compared to last year, according to the real estate brokerage Redfin. Sales ticked up slightly in June. But Bloomberg's U.S. housing reporter Prashant Gopal says there's an even grimmer picture for home sales emerging across the country. I looked at the spring season, and that was the lowest since 2012.

3:35His one word to describe the market? Weak. I mean, actually, you could say it's the weakest housing market since the wake of the great financial crisis. When it comes to real estate, people always talk about whether we're in a buyer's market or a seller's market. But Ansley Stokes, a realtor in the Washington, D.C. area, says this spring freeze has left everyone frustrated. In a slower market like we're in now, both parties can sometimes feel like they are losing. I'm Sarah Holder, and this is The Big Take from Bloomberg News. Today on the show, a stalemate in the American housing market. How unaffordability and uncertainty have combined to slow down U.S.

4:21home sales. and what could get people moving again.

4:28Buying a house in the U.S. has become more and more of a pipe dream for many Americans. But Bloomberg's Prashant Gopal says there were signs that the country's punishing housing market was starting to get better, at least for some buyers, at the beginning of this year. We saw more people starting to list their homes again. We saw inventory as a whole started to rise. And then mortgage rates, you know, ticked down slightly. So all of that really looked positive. It looked like we were finally beginning to break out of this cycle. But that didn't quite happen. Because just as things were looking up, the economy started feeling the effects of Trump's first few months in office.

5:12Those inventory levels rose, but buyers didn't show up. And, you know, they didn't show up because there was a lot of chaos in the economy. The Trump administration's cuts to the federal workforce continue. And the move sent Wall Street plummeting. Small business owners are terrified over what's next after President Trump's tariff announcement. There was one thing after the other, and I think a lot of buyers just were spooked by the whole thing. That's the big change this year. We track the absorption rate. It's basically what percentage of the available inventory is getting taken off the market by buyers in any given one-month period.

5:49That's Ansley Stokes, the realtor who works in the Washington, D.C. area. The higher the absorption rate, the stronger the market is from a seller's perspective. So we've seen that absorption rate kind of steadily fall off since the beginning of the year. And it has largely dovetailed with the election and with all of the changes coming down from the federal government. Cuts to staffing in Washington hit the D.C. area especially hard, with its high population of federal government employees. But the rest of the U.S. felt the impacts of the new administration's policies too. Buyers, they're up against worsening affordability, but in the background there's also uncertainty with the trade war and just the overall economic situation, federal layoffs, layoffs in the tech industry.

6:37Daryl Fairweather is the chief economist at Redfin. A lot of buyers just aren't feeling like now is the right time to commit to a really big purchase. The median home price in America was over$400 ,000 in April. And mortgage rates have been hovering around 6.8 % for much of this year. Home sales are near record lows, and that's because there are so few buyers out there. If fewer sales are happening, you'd think sellers might bring down prices to help attract buyers. Is that happening? Well, instead of bringing down prices, sellers are just like kind of taking the ball and going home. They're staying put instead of participating.

7:15in the housing market, they don't feel like it's worth it to lower their price because if they were to re-enter the market, they feel like they couldn't afford to buy the same kind of home that they're in.

7:29Some of those would-be sellers also locked in low mortgage rates during the pandemic, like Prashant. I have a 2.3 % mortgage rate. Wow. I'm sure a lot of listeners would be jealous to hear that. To get me to get rid of that 2.3 % rate and take on, you know, wherever it is now, 6.85 % is not going to be very easy. So for me to sell, I have to really have a good reason to sell and buy something else. It's called the mortgage lock-in effect. And Ansley, the D.C. realtor we heard from earlier, says that cycle of sellers feeling locked in and buyers having limited options can be demoralizing. For sellers looking back over the past, you know, five years and watching how quickly everything sold.

8:18And it seemed like everybody who listed a house got multiple offers and the sellers got everything that they were looking for. And so now all of a sudden sellers feel very beat up. They're feeling very defensive. They think their properties are selling for less than they should be. So that causes a lot more friction in a transaction. Sellers looked at this market and they said, wow, this kind of sucks. So to paint a picture, prices are still high. Mortgage rates are still high. Sales are way down. And new listings are starting to retreat. And that's created sort of this perfect storm. Yeah, I think that's true.

8:56You know, there's certain reasons why people have to sell in any economy, right? If you get a divorce, if you have a kid, if you have to move for a job, those people will move no matter what's going on. But there are other people who can choose to move or not move. Those are the people who might be pulling back right now in terms of listing their homes. So what's going to thaw out the frozen U.S. housing market? That's after the break.

9:48your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for work. Download the ChatGPT desktop app or contact sales to learn more. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster.

10:24With revenue agents and automations working around the clock, you'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Hey there, everybody. Amy Robach and TJ Holmes here from the Amy and TJ podcast. We are your one-stop shop for the biggest newsmaking headlines of the day every day. And it starts with our morning run. Yes, go for a run with us. Maybe you can take us along when you're on your actual run outside. Or if you don't feel like going out still, you get what we're saying. It's our morning run. It's our daily news rundown of the top stories that will get you going before you even finish that first cup of coffee.

11:04Whether it's the latest information on the latest outbreak affecting your family's health, updates on the Nancy Guthrie investigation, or the killer mom trial out of Massachusetts, we've got you covered. Yeah, there's a lot of news happening these days, and some of it's breaking. We are on top of it every single day. There's a bunch of true crime going on out there as well, and so much of it dominating on social media. We have our eye on it all. Listen to the Amy and TJ podcast on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts.

11:40We've talked about what's keeping U.S. homebuyers and sellers in a stalemate right now. High prices, high mortgage rates, and a rocky economic outlook. But what could turn things around? Bloomberg's Prashant Gopal says would-be buyers and sellers are holding out for one of those things in particular to change. Mortgage rates. A lot of people are talking about this magic 6 % rate, which, you know, I don't know how true that is. maybe there is some magical rate that if it drops below that, psychologically, that's enough to get buyers off the fence. This week, the Federal Reserve chose to hold interest rates steady, which means mortgage rates likely won't change dramatically unless there's a major shock to the economy.

12:25At the Fed meeting on Wednesday, when Chair Jerome Powell was asked about what his rate decision meant for the housing market, he pointed to another issue beyond rates. We haven't built enough housing. This is not something the Fed can help with, but then that'll be the case even after things normalize. And Powell is right. Even if mortgage rates do come down, the U.S. is still short some 4.7 million homes, according to Zillow. I asked Daryl Fairweather at Redfin about this. What role does increasing housing supply and increasing that inventory play in getting out of this stalemate? Well, new construction is playing a much bigger role in the market than it has in the last decade.

13:09Because of the fact that there are so few existing homes for sale, many people are turning to new construction. In terms of new construction single-family homes, those tend to be the most expensive because they're brand new, they're going to cost more. And for a first-time buyer, it's oftentimes too big of a hurdle to go straight to that new construction home. Most people choose starter homes that are existing homes. But new construction of dense housing, like missing middle housing, like townhomes, duplexes, can really do a lot to make that entry point more viable for a first-time buyer. Some cities and states around the country are doing things like loosening zoning restrictions to try and encourage construction of that missing middle housing.

13:51Essentially, homes that are somewhere between a single-family home and a high-rise building. And there are efforts to address the housing crisis at the federal level, too. Just this week, the Senate Banking Committee advanced legislation meant to spur more housing development and make it easier for Americans to access loans to buy and repair homes. The bill will face House approval in the fall. But Daryl says supply is always just one part of the puzzle. I think all of these solutions are going to be really helpful. Part of the problem is that with high interest rates, it's really expensive to build that kind of housing.

14:26And people have a lot of their equity locked up in their homes. So if mortgage rates were to fall, it could actually help development as well. So that's one reason to hope for lower interest rates. It can take time for these long-term efforts to pay off, for policy changes to pass, or for new construction to break ground. In the meantime, the real estate agents I spoke with are seeing their clients react to the realities of the housing market as it stands now. We're seeing a record number of price reductions from a list price perspective, and then we're seeing additional price concessions once negotiations start.

15:03D.C. area realtor Ansley Stokes says sellers are finally starting to meet buyers where they're at. Her advice to those sellers? Set realistic expectations. It doesn't matter that a year ago that the similar house sold for 10 percent more. That is not the market today. Everyone's used to the COVID market where, you know, sellers could put a house on the market and get anything they wanted for it. That's Christina Kipping, a real estate agent based in Tampa. I just got a buyer under contract fully executed this morning. And with them, it was we weren't going out first weekend making offers. That's not happening anymore.

15:41Buyers are looking at houses if they like it. They may go back two weeks later after they've done full-on research of the neighborhoods, the schools, you know, walkability. I just see buyers are being a little bit more patient. But not everyone can afford to take their time. There's an old adage in real estate about all the D's that drive real estate purchases. Colin Wainwright from Nashville again. You have death, divorce, diapers, diamonds, debt. All of these things are life events that drive the real estate industry forward and make people need to have a change in their housing needs. And so a lot of people who had been sitting on the sidelines when the rates first jumped up, they may have been able to wait for a little while.

16:30But a lot of times those D's can't wait anymore. And so the market has to turn forward.

16:38This is The Big Take from Bloomberg News. I'm Sarah Holder. To get more from The Big Take and unlimited access to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. If you like this episode, make sure to follow and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow.

17:08Before you sign off, you tuned in for ways to help teams move faster, make sharper decisions, and turn scattered contexts into work they can use. ChatGPT for Business can help. ChatGPT for Business gives teams a shared workspace with admin controls, permissions, and access to work and codecs in ChatGPT. This means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for Work. Download the ChatGPT desktop app or contact sales to learn more. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it.

17:48That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person. How you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com. It's time to plan ahead and make sure your brand is showing up in ways that can have an impact. Four Imprints promotional products are designed to work as hard as you do and make a lasting impression.

18:22From quality apparel, including exclusive brands, to drinkware, tech, and totes, they've got thousands of options to fit your brand and budget. Plus, you get free samples, expert help, and their 360-degree guarantee. So you can be 4imprint certain everything shows up just right, right on time. Explore more at 4imprint.com. 4imprint. 4 certain.