Good Question: What's causing the housing market to cool off?

  • Stafford Family Realtors
  • 07/19/22

Across the country, the ever-hot housing market is starting to cool down. According to Redfin, a real estate website, cities along the West Coast are cooling the fastest. That includes San Jose, Sacramento, Oakland and Seattle, where there's a strong mix of prices dropping and inventories rising. But those same trends are being felt in the Midwest, as well.

 

So what's causing the housing market to cool off? Good Question. Our Jeff Wagner learned finding a new home is getting a little easier but not necessarily cheaper.

 

If your summer days have been filled with visiting open houses and making offers over asking price, rejoice.

 

"It is more in the buyer's favor now than it was probably a year ago," said Chris Galler, CEO of Minnesota Realtors.  Is Minnesota's market in a cooldown?

 

"Realtors had situations where buyers just couldn't afford it. A 0.75 percent increase in interest rates, that's almost a whole percent. That does throw [buyers] off and so you see some people lose their ability to afford a home," he said.

 

Less affordability means buyers are being patient. Natalie told us on Twitter "I see the drop in prices, targeting late fall." Trent tweet, "waiting to buy because it will definitely come back down."

 

While there's no guarantee home prices will suddenly drop, inventory is trending in the right direction.  In June, there were more than 12,293 homes for sale, an 8.2 percent increase compared to June of last year. May also saw a 9.9 percent increase in homes on the market compared to 2021. It's a big change when you realize the 10 months prior all had fewer homes when compared to the previous year.

 

Galler said more homes available proves they're not selling as quickly. But competition remains fierce.  "The best homes in the marketplace are going fast, but there are other homes that are great homes and they're starting to sit a little longer," he said.

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