Agents Say Buyers Most Likely to Compromise on Location to Improve Affordability

TORONTO & NEW YORK, November 20, 2024--(BUSINESS WIRE)--The Real Brokerage Inc. (NASDAQ: REAX, "Real"), a technology platform reshaping real estate for agents, home buyers and sellers, today released results from its October 2024 Agent Survey. With responses from agents across North America, the survey reveals growing optimism about the next 12 months, even as U.S. mortgage rates remain near multi-year highs. Agents also highlighted the growing importance of buyer trade-offs, such as compromises on location or home features, to overcome affordability challenges in this higher-rate environment.

"Our October survey shows that while affordability remains a major hurdle, optimism among agents is growing because they see opportunities in today’s dynamic market," said Tamir Poleg, Chairman and CEO of Real. "Even with elevated mortgage rates, buyers are adjusting their expectations — compromising on location, features, and more — and agents are stepping in to guide them through these trade-offs."

"Affordability challenges are forcing buyers to rethink their options, but this also creates opportunities for agents to provide valuable guidance," said Sharran Srivatsaa, President of Real. "Whether it’s helping buyers navigate trade-offs or explore alternative options like renting, success in this market isn’t about waiting for conditions to improve – it’s about adapting to the market as it is."

Key Survey Findings: Market Trends and Insights

• Agent Optimism Index Continues to Rise in October: Agents were asked, "Compared to one month ago, are you more optimistic or pessimistic about the outlook for your primary market over the next 12 months?". Forty-seven percent (47%) of agents reported feeling more optimistic, with an additional 20% feeling significantly more optimistic. This outweighed the 9% feeling more pessimistic and 2% significantly more pessimistic, while 21% remained neutral.
  The weighted Agent Optimism Index rose slightly to 68.5 in October, up from 67.0 in September, with scores above 50 indicating a net positive outlook. Optimism improved in the U.S. but moderated in Canada.

• Market Continues to Balance as Buyers Gain Power: When asked whether their market was a buyer’s or seller’s market, 35% of agents described their market as a seller’s market, down from 38% in September. Meanwhile, the share of agents reporting a buyer’s market rose to 27%, marking a year-to-date high and up from 23% in September. Balanced market conditions were cited by 39% of agents, a slight dip from 40% the prior month.

• Affordability Remains the Largest Hurdle: Agents overwhelmingly identified affordability as the top challenge for prospective homebuyers, with 57% of respondents citing it as the primary issue, a sharp increase from 48% in September. Inventory constraints held steady at 22%, while economic uncertainty fell to 14% from 20%, likely reflecting a post-election environment.

• Agents Expect Industry Transaction Declines to Deepen in October: Agents noted year-over-year declines in North American industry home sale transactions persisted in October. The Transaction Growth Index, which measures year-over-year changes in home sales, dropped to 44.4 in October, down from 46.6 in September, indicating a sharper decline as the index remains below 50.

• High Mortgage Rates in 2025 Likely to Drive Buyer Trade-Offs: If 30-year mortgage rates remain between 6% and 7% in 2025, nearly half of agents surveyed (44%) expect prospective home buyers to adapt by compromising on home size, features, or location to make purchases affordable. An additional 20% expect more buyers would move in with family, while 17% foresee increased demand for single-family rentals. A smaller share (7%) anticipate greater interest in multi-family rentals.

• Location Expected to Be Buyers’ Top Compromise: Faced with affordability challenges, prospective buyers are most likely to compromise on location, according to 38% of agents, suggesting they may consider homes further from city centers or outside their ideal neighborhoods. Twenty-eight percent (28%) of agents expect buyers to settle for fewer or less-updated features, such as older kitchens or bathrooms, while 16% predict compromises on home size. Notably, 12% of agents were unsure how buyers might prioritize their trade-offs, reflecting the complex decisions facing today’s homebuyers. These findings underscore the tough decisions buyers face in today’s high-rate market.