A Divided Market: The Great Contradictions of the Residential Real Estate Market Moving into 2025

October 23, 2024



In this week's edition of Above the Line, we explore the complex contradictions shaping the real estate market as we approach 2025, emerging risks in bank risk transfers, and shifting trends in home down payments. These developments highlight the evolving dynamics of real estate finance and investment as we near year-end.

Let's dive into these significant developments and their implications for our industry. 

---

The Great Contradictions of the Residential Real Estate Market Moving into 2025
HousingWire
Despite Fed rate cuts, mortgage rates remain stubbornly high at 7.2%. The market faces several paradoxes: rentals are everywhere yet homeownership remains the gold standard, housing demand varies drastically by region, and while it's technically a seller's market, selling has become increasingly challenging.

Banks' Risk Transfers Could Pose Financial Stability Risk, IMF Warns
Bloomberg
The IMF warns that significant risk transfers (SRTs) by banks could create "negative feedback loops" during periods of stress. This popular Wall Street tool, while boosting bank solvency ratios, may mask traditional lenders' resiliency and requires close monitoring by financial supervisors.

Down Payments Drop from Historic Highs as Market Competition Eases
Realtor.com
The median down payment has decreased to 14.5% ($30,300) from last quarter's peak of 14.9% ($32,700). This decline reflects reduced buyer competition and increasing inventory, though regional variations persist with significant differences between coastal and inland markets.

---

REDD Accounting is a global firm specializing in property accounting and bookkeeping services for real estate companies. Whether you are a small-scale operation or managing a large portfolio of properties, we have the expertise and resources to support your unique needs.