The Real Estate Market Could Cool Down – What Does This Mean For Homebuyers?
A recent report from real estate website Redfin shows several signs that the residential market may be cooling, Fortune reports. After more than a year of bidding wars, low inventories and a record house price appreciation rate of 19.2%, Redfin’s latest research shows evidence of market cooling.
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The report notes that “the market is still hot, but a slowdown in online searches, home visits and mortgage applications shows that more and more buyers are overpriced.”
As interest rates rise, driven by increases in the prime rate, a wave of potential buyers were likely looking for their dream home ahead of further interest rate increases. Now that demand is changing as homebuyer prices are out of the markets.
Redfin reported that year-over-year growth in home visits is below 2021 levels, as are the number of mortgage applications and online home searches. More sellers are also cutting prices after their homes don’t sell immediately, Redfin reported.
If you’re looking to sell, now may be the right time, as the market is still hot, Redfin estate agents advise. “There are still plenty of buyers and mortgage rates will only go up, making it more expensive to find your next home,” Denver realtor Justin Hess told Redfin.
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If you’re looking to buy, prices could drop soon, but you could end up with the same mortgage payment if interest rates continue to rise, which the Fed has flagged as a likely eventuality.
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