Real estate market finally cools down

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For the first time since early last year, homes on average sold below listing price.

As list prices drop, fewer buyers are booking tours and homes are selling more slowly, industry experts say. The once-scorching real estate market is finally cooling down after hitting record highs earlier this year, they add.

The market wind-down comes after average home prices in the United States skyrocketed over the last two years as the country emerged from early COVID-19 pandemic lockdowns and the economy kicked into high gear. Home prices topped $440,000 earlier this year, according to federal data, more than $100,000 above pre-pandemic levels.

Last month, the “monthly mortgage payment on the median asking price home was $2,306” at that rate, “up 39% from $1,665 a year earlier, when mortgage rates were 2.87%,” Redfin said. Though still high, it’s “down from the peak of $2,461” in early June — the same month the Fed approved a rare rate increase of three-quarters of a percentage point as inflation was surging.

"In terms of the current housing cycle, we may be at or close to the bottom in contract signings," Lawrence Yun, the group’s chief economist, said in a statement."This month's very modest decline reflects the recent retreat in mortgage rates. Inventories are growing for homes in the upper price ranges, but limited supply at lower price points is hindering transaction activity.

ShowingTime, a home tour company, also recorded less activity in recent weeks. Home tours in July dropped nearly 17% compared to the same time last year, according to the company’s showing index.

 

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