Housing Cooldown Is Underway—Here’s How Your Local Market Stacks Up
Inventory levels are rising quickly in a number of regional markets across the U.S., and elevated mortgage rates are also helping to cool an overheated market, but buying conditions are still far from normal, according to Realtor.com’s housing market tracker. Active listings on Realtor.com rose 128,200 last month to a total of 747,500, the largest jump recorded in the database’s six-year history, but supply remains at a historic low post-pandemic, Fortune reports.
Rising interest rates have pushed the total cost of homeownership 30% higher since the start of the year, and as more buyers pull out of home purchases, the market is cooling at a rapid pace, but not all markets are decelerating equally. The Mountain West, Southwest, and Southeast housing markets are seeing the fastest regional corrections with large gains in new-home construction in states such as Utah, but active listings are still well below pre-pandemic levels.
“The rise in interest rates, even after accounting for the recent pullback, combined with higher home prices have pushed the cost of homeownership up 30% since the start of the year. At the same time, general angst about the economy, job security, and inflation is playing into the consumer mindset,” Ali Wolf, chief economist at Zonda, tells Fortune. “Many [buyers] have found themselves debating whether they want to make one of the biggest purchases of their lives today or if they’d rather wait.”
Among the 917 markets tracked by realtor.com, 35 markets have inventory levels above July 2019. That's up from June when just 18 markets were above pre-pandemic inventory levels. However, it shows we still have a long way to go until we're back to normalcy.