Borrowers are grappling with steep affordability issues – but there are always options
Major shared in a recent Redfin industry survey of real estate agents have been echoed across the mortgage industry, including by one company CEO.
Redfin released its annual survey of agents last week. When asked about the challenges they faced over the next five years, 64.2% said affordability for buyers was a major concern. When combining the two categories that indicate a concern, the percentage increases to 92.6%.
The second highest concern on the list was the ongoing lack of housing inventory. A combined 82.6% had some level of concern about the lack of homes, with 42.8% showing major concern.
Josip Rupena (pictured top), CEO of Milo, a company that specializes in crypto home mortgages, echoed the agents' concerns.
“Affordability is definitely the biggest issue people are discussing,” Rupena told Mortgage Professional America. “The lack of inventory is real, but more importantly, it’s the lack of appropriately priced inventory.”
Rupena believes some sellers are deciding to drop prices to get a deal completed.
“There are a lot of homes sitting on the market because they’re overpriced,” Rupena said. “Sellers who really need to sell are starting to realize their pricing isn’t in line with where the market is. As prices adjust, we’re seeing more activity. If that trend continues, and if rates drop, things could start to move more quickly.”
In the Redfin industry survey, 50.4% of agents believe home sales will rise in 2025 compared to 2024, while 36.2% believe home sales will remain the same. According to the National Association of Realtors (NAR), pending home sales increased by 2% in February.
While new home sales are still near record lows, First American chief economist Mark Fleming recently told Mortgage Professional America that the picture is far bleaker compared to historical housing numbers.
Affordability is a two-way street
While home prices are part of the housing affordability equation, the other side is the amount of wealth buyers have. With drastic market drops last week due to the Trump administration's tariffs, the equation may have changed for potential buyers.
Melissa Cohn, regional vice president at William Raveis Mortgage, called the drop in wealth the “800-pound gorilla.”
Melissa Cohn of William Raveis Mortgage said market losses from tariffs are shaking buyer confidence. Craig Garcia of Capital Partners Mortgage noted rising inventory and tough condo financing add pressure.https://t.co/5KE2kZdt8a
— Mortgage Professional America Magazine (@MPAMagazineUS) April 7, 2025
“Most people’s wealth is either in their home or in their 401k, for the most part,” Cohn told Mortgage Professional America. “And when your 401k has dropped in value significantly, you feel less secure to go ahead with the purchase. Lower rates are a wonderful thing, but having less wealth is another issue.”
There is an ongoing debate about how the Federal Reserve will respond and how soon it will act. Reuters reported on Tuesday that traders put at about a 56% chance that the Fed will cut interest rates in May. Some traders were banking on as many as five rate cuts for the rest of 2025.
Alternate mortgage financing could be an option
For potential homebuyers who have invested in Bitcoin, Rupena sees an opportunity for Milo to help them enter the market.
“If they have enough bitcoin, we’re able to solve for their ability to purchase,” Rupena said. “So while affordability is a major challenge for many buyers, we’ve found ways to help a specific group of clients overcome it.”
Rupena believes cryptocurrency investors have largely stayed out of the housing market because they do not feel they can get the right value to enter. With the volatility in the current market, Rupena said those buyers see an opportunity.
“We’re seeing increased activity from crypto clients who’ve been on the sidelines for years,” Rupena said. “They’re viewing this market as an opportunity to put in offers at levels that feel much closer to fair value, and they’re getting properties under contract.
For them, affordability isn’t the same issue it is for traditional buyers. With our crypto mortgage, if they have enough bitcoin, we’re able to solve the qualification gap without requiring them to liquidate assets. That’s what’s allowing them to finally act.”
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