A recent report from real estate website Redfin shows several signs that the residential market could be cooling, Fortune reports. After more than a year of bidding wars, low inventory, and record high home price appreciation rates of 19.2%, Redfin’s latest study shows evidence of the market cooling.
The report noted, “The market still feels hot, but a slowdown in online searches, home tours, and mortgage applications shows more buyers are getting priced out.”
As interest rates rise, driven by increases in the prime rate, a flurry of prospective homebuyers were likely seeking their dream home before further interest rate increases. Now, that demand is shifting as homebuyers are priced out of markets.
Redfin reported that year-to-year growth in home tours sits below 2021 levels, as does the number of mortgage applications and online home searches. More sellers are also reducing prices after their houses don’t sell immediately, Redfin reported.
If you’re looking to sell, now could be the time, as the market is still hot, Redfin real estate agents advise. “There are still plenty of buyers and mortgage rates are only going to keep climbing, making it more expensive to find your next home,” Denver real estate agent Justin Hess told Redfin.
If you’re seeking 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 indicated is a likely eventuality.
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