Shortly after the Commerce Department released the report on July 28, revealing that the economy showed negative growth for a second straight quarter — shrinking by an annual pace of 0.9% — home sellers hoping for higher housing prices to continue are now concerned.
A study by luxury real estate brokerage RubyHome analyzed data from Google Trends for the week of July 25 to July 29 to see how consumers would react to the news in real-time.
“Spike in the search terms above shows that consumers are on edge right now,” Tony Mariotti, the founder and CEO of RubyHome, told The Post. “It’s a double-whammy: the combination of rising interest rates and contracting GDP fuels consumer uncertainty about home prices.”
“Real estate brokers see the effects of the changing sentiment: At RubyHome, we’ve seen a slowdown in luxury home and second-home purchases as wealthier individuals take a ‘wait and see’ approach,” he added.
Meanwhile, search volume for “what does a recession mean for me” also simultaneously spiked a massive 1,900%.
“The silver lining today is that we are not seeing 30 bidders on mid-market homes, and there is more inventory on the market than during the pandemic,” Mariotti explained.
According to the real estate brokerage Redfin, analysis shows the US housing market has “slowed considerably” due to decades-high inflation and soaring interest rates, which has put many would-be home buyers on the rental market.
This time last year, a 30-year fixed-rate mortgage averaged 2.8%. Now, it is averaged at a significant 5.3%.
And buyers who poured into “popular migration destinations” at the height of the pandemic are likely to see price declines in those overheated markets.