The Housing Market Shows Signs of Softening—Has It Topped Out?
For many months now, it’s seemed like nothing could slow down the American housing market. But wait! The tide may be beginning to turn—even if just a little.
Over the past few weeks, the rate of price growth has begun to slow and fewer buyers are seeking mortgages to purchase homes. The competition for available homes, while still formidable, may not be quite as intense as it’s been. And this could provide buyers a sorely needed opening.
“The market’s topping out,” says Mark Zandi, chief economist at Moody’s Analytics. It’s “starting to show cracks. It feels like we’ve hit the apex, and we’re moving to the other side of it.”
That does not mean there’s a bubble on the verge of popping and that prices are about to plummet in a free fall reminiscent of the last housing bust, according to economists and housing experts.
Median home list prices are still more than 12% higher than they were the same time a year ago. But a combination of homebuyers being priced out of the market, a severe shortage of properties for sale, fears of another real estate bubble, and a return to pre-pandemic life may have dampened the full-throttle demand we’ve been seeing all year.
This could result in fewer bidding wars and more reasonable offers over the asking price. And it might just provide the opening that many weary buyers need.
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