Homebuyers feeling inflation squeeze as US ‘headed for recession,’ Redfin CEO warns

As the housing market continues to be battered by rising interest rates and sky-high prices, Redfin’s CEO warned that homebuyers are feeling the pressure of inflation as the US heading into recession.

“People looking to buy homes right now are still driven by the same factors,” Redfin CEO Glenn Kelman told “Cavuto: Coast to Coast” on Friday.

“Rents are up 15% year over year. They’re really feeling the pressure…I just think we’re heading into a recession.”

Kelman’s comments follow the fact that his real estate company laid off 8% of its employees due to housing applications falling nearly 20% from expectations in May. The CEO announced the layoffs in a public post on the company’s website on Tuesday.

“We tried to anticipate market developments, and we did that as a last resort, but it’s the right thing to do,” he explained.

Meanwhile, the Federal Reserve on Wednesday raised rates by 75 basis points for the first time in nearly three decades to combat runaway inflation.

Kelman predicted years of fewer home sales as Americans continue to navigate the “crazy” market.

“It’s a tough call simply because the market has never been wilder. But we expect the next few months to be very mild,” he predicted.

“If you look at pending sales, they’re down about 8%, but demand is down about 15%…it’s a leading indicator that sales will continue to pull back because equity portfolios people were wiped out.”

Redfin CEO Glenn Kelman told FOX Business that despite the U.S. economy facing runaway inflation, there “will not be a crash” in the housing market. (Stock)

He went on to say that the sudden rise in mortgage rates is up almost 50%, which “will put a lot of people out of the market.”

According to the CEO of Redfin, the real estate brokerage firm had “a really tough time” in February and March for bids to “hold up” as the Seattle-based company saw “fewer people bidding on homes.”

Kelman said he doesn’t expect the housing market to “collapse.”

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“There will be a slight increase in foreclosures, but it will be a very low number. We haven’t seen any distress in the market,” he noted.

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“I don’t think these credit-driven forced sales that are really destroying the market have surfaced yet, and I don’t expect them to.”

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