5 signs the housing market is starting to slow

By Anna Bahney | CNN

There is a shift happening in the housing market.

After more than a year of soaring demand, exploding home prices and increasing real estate sales, the market finally seems to be cooling off.

“The housing market isn’t crashing, but it is experiencing a hangover as it comes down from an unsustainable high,” said Taylor Marr, Redfin deputy chief economist.

Mortgage rates have increased more than two and a half percentage points this year. And the higher costs of financing a home have changed the calculations for many would-be homebuyers. As a result, year-over-year home sales have been dropping in recent months.

In a Fannie Mae survey on homebuyer sentiment, a record 79% of respondents said it’s a bad time to buy a home.

“While a lot of home sellers are already dropping their prices, more homeowners will likely decide to stay put now that the mortgage rate on a new home is significantly higher than their current one,” said Marr.

While the market is still very strong by historical standards, here are five reasons to believe the tide is turning.

1. The inventory of homes for sale is growing

With demand for homes outstripping supply, the inventory of homes for sale had been consistently declining year-over-year during the pandemic housing boom, said Danielle Hale, chief economist at Realtor.com. “We were talking about low inventory in 2019 and it kept getting worse.”

But in May the inventory started moving in a different direction, according to Realtor.com’s data, and the most recent week saw active listings up 13% from last year.

“Seeing the number of homes increase is great news for buyers,” said Hale. “It shifts the trend and they are seeing more homes. It should help balance the market, slowing down home price growth and increasing the time …read more

Source:: Los Angeles Daily News

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