These are the 5 D’s driving the housing market. One is diamonds and another is death, says real-estate CEO.

What’s driving people to buy those 4 million plus homes? Robert Reffkin, founder and CEO of Compass
COMP,
+1.18%,
a real-estate company, says it’s all about the five D’s.

“There’s a lot of pent-up demand. You have the five D’s keeping the market moving,” Reffkin said in an appearance on CNBC.

“Diapers, diplomas, diamonds, divorce, [and] death,” he explained. “Those life events keep the market moving at this pace.”

The D’s represent phases in a home buyer’s life when they need to move to a larger home as their family expands, or to a smaller house as their household contracts.

But aside from those home buyers who have a pressing need to move, everyone else is on pause in this housing market, given how high home prices and mortgage rates are, he added.

“All the people that want to move, they’re really on pause… it’s the people that want to move, not [those] that have to move,” Reffkin said. 

Many home buyers are spooked by how unaffordable the market has become. Affordability is at a 39-year low, while the 30-year fixed-rate mortgage is at a 23-year high. Home prices continue to climb. 

The share of consumers who think it’s a “bad time” to buy a home has risen to a record high, at 85%, according to a recent survey. 

Returning the housing market to more affordable levels would require one of three things, ICE’s
ICE,
+0.45%
Andy Walden said in a recent report: Either the 30-year mortgage rate needs to fall by 4.4 percentage points, the median household income needs to rise by 62%, or home prices need to fall by 38%.

People are waiting on the sidelines for one shoe to drop. And to that end, demand is “building up month over month,” Reffkin said.