A historically hot housing market may finally be cooling down as a result of the Fed’s upward pressure on mortgage rates, Fortune reports. The number of active listings across the U.S. is on the rise, sales seem to be slowing, and 15% of April sellers reduced their asking prices, up from 9% in 2021. A growing number of homebuyers are taking a step back from the housing market to wait for an increase in inventory and a drop in record high prices.
In the meantime, a less bombarded market is prone to deceleration on nearly every front, a long-anticipated end to a two-year frenzy of fierce competition and speedy home sales.
The softening we've seen so far is fairly mild. However, industry insiders tell Fortune the cooling over the past few weeks is just the start. The lack of inventory over the past two years has created a pileup of would-be buyers. Even as rates price out some of those buyers, there are others waiting to take their place. Housing economists say it will take time to work through that pent-up demand. But once we do, the housing market could cool even further.