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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 50 T aylor Marr is the Deputy Chief Economist on the Research Team at Redfin. He is passionate about housing and urban policy and is an advocate for increased mobility and affordability. He laid the framework for our migration data and reports and diligently tracks the housing market and economy. Before Redfin, Marr built financial market index funds for Vanguard at the University of Chicago. Marr went to graduate school for international economics in Berlin, where he focused on behavioral causes of the global housing bubble and subsequent policy responses. Marr's research has been featured in the New York Times, the Wall Street Journal, and the Economist. He was also recently the President of the Seattle Economics Council and collaborates frequently with the Fed, HUD, and the Census Bureau. MortgagePoint recently spoke with Marr to pick his brain on the current real estate market, the reports he authors, where the market is heading in the next six months, and the possibility of a recession. Marr also touches on happenings with the Federal Reserve and gives renters some welcome news. Q: To start, you laid the framework for many of the reports which are now industry standards starting a little over seven years ago. Are you happy with the progress you've made? Is there anything else you would like to cover? I am happy with some of the progress for sure. In particular, I'm passionate about migra- tion and mobility overall of people being able to relocate, find a better home, find a better neighborhood, and some of the work that we've done tracking migration and tracking housing markets. I think that paved the way for a lot of interest in more migration products and research that we've seen come out since then. I would like to do more in terms of local migra- tion—where and what neighborhoods people are choosing, what ones they're priced out of, and how it relates to opening up different areas of opportunity that might become more expensive. Mobility within a metro is equally as important for building homeownership and where families can grow up. I've been looking forward to getting more into the rental market as well. [Redfin] has started to track what's going on in the rental market for a few years now, and we've ac- quired the rental company Rent. That's been a big plan to focus research on. There's a lot more we can do there in terms of investigat- ing where rental housing is that's affordable and what policies are leading towards that. That's a big area of opportunity. Q: Based on current reports, where do you think the market is headed over the next six months? We're in uncertain times because mortgage rates are fluctuating quite a bit. What is clear, though, is that the market was weakest about six months ago in November 2022 when rates were over 7% and prices were starting to pull back quickly. They were decelerating at some T H E P O I N T F e a t u r e d C o n v e r s a t i o n s W i t h M o r t g a g e ' s B e s t a n d B r i g h t e s t Taylor Marr DEPUTY CHIEF ECONOMIST, REDFIN of the fastest paces in over a decade last fall. At the same time, sales were rapidly fall- ing; they bottomed out in January, and we've started to see a bit of a rebound, perhaps inklings of a recovery beginning. However, we don't anticipate much more growth this year. In fact, 2023 is going to be overall one of the worst years in more than a decade in terms of sales, in addition to prices declining for the first time since the Great Financial Crisis of 2007-2008. Overall, looking forward to the remainder of the year, we should see a little bit of stability in terms of sales, which are no longer declining rapidly, but they're also not going to recover too much. We still anticipate about 4.3 million sales for the year, which is about the rate that the National Association of Realtors (NAR) just reported in early June. We did anticipate downward pressure on mortgage rates where they would fall from about six and a half closer to the low sixes. I think that's an uncertain estimate [from NAR], because right now, the Fed may be done hiking, but they may have more room to grow. There's a lot of pressure. We had the new bank- ing crisis that was putting some downward pressure on rates for a while but that seems to be resolved. Overall, there's still a lot of eco- nomic growth weakening on the horizon, and the labor market is still expected to cool further on the horizon. Both of those things could help with downward pressure on mortgage rates, pulling them closer to 6% as we anticipate, but right now rates have been shooting in the other direction as the economy has been more resilient while inflation has not come down as much. So, that's complicated our outlook. Overall, the outlook we set forth six months ago seems to be still in play, and we've been just tracking right alongside that with how sales have progressed, and what's happened with prices. They seem to have not necessarily bottomed out, but they also haven't fallen much further. They fell about 3% back in March and April, and they've been steady since then according to our weekly data that's been tracking this. So, the projections we put forth at the end of last year, we've been tracking right along that, and we'd still probably agree with that outlook for the rest of the year—that price prices aren't going to fall too much further, they might even steadily increase in the back half of the year while sales will improve slightly. It depends a lot on what the Fed decides to do over the next couple of months at their July and September meetings.