Inventory should improve compared to last year, and the home sales cycle should be shorter than usual if rates climb as high as expected, Redfin CEO Glenn Kelman said in an interview with CNBC this week. 

About three-quarters of homebuyers are worried about inflation, Kelman estimated. With others anticipating the forthcoming rate rise, meanwhile, many homesellers looking to capitalize.

“We have done an unusual number of consultations coming into this homebuying season, with people who want to prepare their homes to list,” Kelman said. “My guess is that the housing market will have a shorter season than usual because interest rates are going to start increasing through 2022.”

Glenn Kelman

Homeowners are rushing to prepare their homes to sell in the coming months, trying to beat an incoming hike in mortgage rates, Kelman added.

Buyers, meanwhile, remain at a crossroads: Should they make a move before rates climb further or wait and hope that prices come down from all-time highs?

“For some people that means they want to hurry up and buy a home before interest rates increase,” Kelman said. “Others are starting to step back from the market.”

There are signs that buyer demand for mortgages has already begun to slide. The Mortgage Bankers Association’s Weekly Mortgage Applications Survey showed demand for purchase loans has dropped as 30-year fixed-rate home loans reached the highest level since April.

If rates continue to climb, Kelman predicts a further slowdown in buyer demand toward the latter half of the year. Price hikes may slow slightly, which overall, he suggested, would be a good thing.

“Because inventory is so low, I don’t think there’s going to be a significant stepback in prices,” he said. “We can’t see the kind of price appreciation we saw over the past two years. That’s unrealistic and, in fact, undesirable.”

What about rent?

Median rent rose 11 percent in the U.S. last year, three times the typical annual rate of 3-4 percent overall. Kelman said he expects rent to keep climbing, but likely not at such breakneck speed.

The increase in 2021 was led by single-family homes, which climbed 26 percent compared to a 1 percent rate hike for apartment homes.

Kelman attributed the steep rent hikes in part to landlords who were hamstrung at the onset of the pandemic by moratoriums on rent hikes.

“Landlords were just dying to raise rents when there was this eviction moratorium,” he said. “They finally got a shot at doing so, and they sent them through the roof. But we’re not going to see the same type of rate increases in 2022 that we saw in 2021, people [just aren’t] going to be able to afford it.”

Email Taylor Anderson

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
TOMORROW: Leaders from eXp, Corcoran, RE/MAX, The Agency, and more are speaking virtually at Connect Now. Listen or watch live + receive the replays.Register Now×
Agent Appreciation Sale: Inman Select for only $85.CLAIM OFFER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription