Signs are Pointing to a Shifting Market toward Buyers
Housing Slowdown? Softening? Whatever You Call It, It's Real and It's Here, 'But in most places, we’re still a long way from a full reversal.'
Ever since the whiplash-inducing, bust-and-boom cycle of the U.S. housing market kicked into high gear with last decade's devastating crash and this decade's ever-escalating home prices, bidding wars, and inventory shortages, one question has been top of mind for buyers and sellers alike: Is this 'party' ending anytime soon?
Lately, those who read economic tea leaves have been hinting that we may be heading toward a significant correction in the go-go-go American housing market. Surely national home price increases have to slow down eventually, right?
It turns out they may be on to something.
Make no mistake: Prices are not exactly tumbling down—at least, not on the national level. And there's no evidence on the horizon of a looming housing bubble about to pop and drag the world economy down with it. Median home list prices are still up 7% year over year this August, according to an analysis of realtor.com data.
But hold on—those numbers are a -off from the past couple of years. In 2015 things were really rolling: Prices were soaring, multiple offers were the norm in many markets, and the number of homes available was falling fast. Last year, home list prices jumped 10% over the year before.
The year before that, it was 9%. So while a 7% rise still sounds like a lot—especially compared with annual inflation of just 2.9%—it's actually a very real sign that the market may finally be coming back down to earth. And the national figures tell only part of the story.
A deep dive into regional housing metrics by the realtor.com data team indicates that some of the nation's highest-profile, bellwether housing markets are starting to slow.
So what does it all mean? Sellers shooting for the stars may not be able to get quite as much as they'd like. And, in a boon to buyers, the number of homes on the market is finally starting to rise. In August, 18 of the 45 largest housing markets, including such heavyweights as San Francisco, New York City, Los Angeles, Boston, and Dallas, saw more properties go up for sale than the previous year.
That means folks not only have a better shot at closing on the home of their dreams, but they'll also face less competition. And that controls runaway price inflation.
'We've hit that tipping point in a lot of these cities where what sellers think they can get is just not possible for many buyers,' says Daren Blomquist, senior vice president at real estate information provider ATTOM Data Solutions.
'Now the pendulum is swinging away from sellers and back toward buyers.' Now housing experts are divided on how much prices will keep going up or whether they'll even—gasp—go flat. So what does the future hold?
Why is the real estate market beginning to slow?
One of the main reasons the housing market is beginning to turn is rising mortgage interest rates.
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#Mortgagerates #Homeownership #UtahRealEstate
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