Company: HOUS
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001398987-25-000020
Chunk: 4

Company: Anywhere Real Estate Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 4
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 2024, the Federal Reserve lowered the target federal funds rate by total of 100 basis points but took no further action at its January 2025 meeting. It is uncertain when additional rate cuts may occur. Yields on the 10-year Treasury note were 4.58% as of December 31, 2024 compared to 3.88% as of December 31, 2023. 

The interest rate environment has adversely affected various aspects of our business. Higher mortgage rates typically lead to reduced homesale transaction volume, decreased housing affordability, and lower activity in both purchase and refinancing units and mortgage origination. We anticipate that our business will continue to be negatively impacted by the current high mortgage rate environment until there is an improvement in the interest rate environment. For example, we believe the high mortgage rate environment is contributing to decreased homesale transaction volume, as potential home sellers choose to stay with their lower mortgage rate rather than sell their home and pay a higher mortgage rate with the purchase of another home and potential home buyers choose to rent rather than pay higher mortgage rates.

Inflation. The prevailing inflationary environment has affected U.S. consumers and the repercussions may persist. As evidenced by the Consumer Price Index for All Urban Consumers (CPI), a gauge employed by the U.S. Bureau of Labor Statistics, there was a 2.9% (not seasonally adjusted) increase for the 12-month period ending December 31, 2024. The CPI serves as a metric for capturing the average fluctuations in prices paid by urban consumers across a diverse array of consumer goods and services. The macroeconomic landscape, including ongoing conflicts around the world, introduces an additional layer of complexity to the inflationary dynamics. These geopolitical disruptions have the potential to intensify inflationary pressures, contributing to the volatility witnessed in the broader economic context. As consumers navigate this challenging landscape, the potential for continued impact on their purchasing power remains a significant consideration.

Affordability. The combination of higher mortgage rates and inflation has substantially increased the cost of homeownership. This situation is further exacerbated by the significant rise in home prices, driven by inventory constraints and the "lock-in effect" where current homeowners are reluctant to sell due to their existing low mortgage rates. 

Future periods may see further negative impacts on housing affordability due to persistent inflation and potential increases in mortgage rates. Rising homesale prices, coupled with the escalating costs of homeowners and flood/other types of disaster insurance, are expected to continue straining affordability. Additionally, further declines in housing inventory