Competition in the housing market has slowed due to rising mortgage interest rates and inflation, as more home sellers drop their asking prices.
There are more price cuts in some cities. In June, 6 out of every 10 sellers cut their asking prices, according to a new report from Redfin.
Thousands of people fled pricier markets such as San Francisco and Los Angeles because of the work-from-anywhere culture in Idaho. A year ago a quarter of sellers in the area dropped their prices.
The top 10 markets are seeing cuts.
As interest rates rose, many markets saw huge price increases that were unsustainable. At the beginning of the year, the average rate on the 30-year fixed mortgage was less than half of what it is today. The cost of ownership goes up.
Home prices in the city went up more than 600% from pre-coronaviruses levels. According to the S&P Case-Shiller index, home prices are up 39% since March 2020.
Workers in big job centers who rely on their stock portfolio for down payments are having a hard time as a result of higher mortgage rates and a potential recession.
Increasing supply on the market is cooling competition. After hitting a record low during the Pandemic, inventory is finally rising as homes sit longer. There was a 28% increase in active inventory last week compared with a year ago.
The real estate markets are moving in the right direction even though they are still undersupplied. The affordability of housing is less than it was before the epidemic. Only 23% of homes for sale are affordable for a household with a $75,000 income, down from 50% last year.
George Ratiu said the road ahead points towards a promising shift away from 2021's severe undersupply and win-at-all-costs competition.
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