The housing market is at 'rock bottom,' says Redfin's CEO, as high rates and prices take their toll

• The housing market's remained tight this year following steep interest-rate increases.
• High mortgage rates and price increases have meant fewer property listings.

The housing market has ground to a near-halt as owners cling on to their properties due to mortgage rates hitting 7% – and surging prices.

Redfin CEO Glenn Kelman says it's hit "rock bottom."

"Sales volume couldn't be worse," he told MarketWatch Wednesday. "The only people moving right now are the ones who absolutely have to."

Housing affordability has worsened over the past year, with the average 30-year mortgage rate hitting 6.96% last week, according to Freddie Mac data.

That's made borrowing more expensive for buyers and discouraged sellers from listing their properties as they're reluctant to give up cheaper mortgages.

"Part of the problem is that there hasn't really been a break in affordability, and homebuyers really need to catch a break right now," Kelman said.

The imbalance in supply and demand has pushed up prices significantly. The share of homes worth $1 million or more is nearing a record high, and the median home price is now about 44% higher than before the pandemic, Redfin data shows.

Kelman told MarketWatch that higher house prices have played a part in reducing mobility for young people in the US.

"Apartments are expensive and houses are expensive, so I think household formation is going to be low," he said. "It's sort of an arrested-development problem."