Extremely hot housing hotspots on the West Coast are cooling faster than any other in the country because high mortgage rate Drive nationwide price correction according to one analyzed by real estate firm Redfin.
Of the 100 most populous U.S. metro areas, Seattle’s housing market cooled the most from February to August this year — a period in which mortgage rates rose. Las Vegas ranks second on the list of the fastest recessions, followed by San Jose, Calif.
Nine of the top 10 cities with dubious distinctions were located in the western part of the country, with four within California. North Port, Fla., was the only East Coast market near the top of the list.
“These are all places where home buyers are increasingly feeling the brunt of rising home prices, higher mortgage rates and the intensity of inflation. They are slowing down partly,” said Daryl Fairweather, chief economist at Redfin. So many people have lost their price and partly because last year’s record-low rates have made them increasingly hot.”
“The good news is that the recession is reducing competition and giving people who can still buy more negotiating power,” he said.
Redfin ranks its rankings on calculations related to year-over-year changes in home prices, declining prices, housing inventory levels, pending home sales, sales-to-inventory ratios and the share of homes going off the market within two weeks. is based. The firm said.
Mortgage rates have skyrocketed since January as the Federal Reserve moves forward with raising interest rates that make it more expensive to borrow money. 30-year fixed-rate mortgages stood at 6.29% as of this week, up from 3.40% a year ago.
The median home value in Seattle is $775,000 — which means the typical monthly mortgage payment is $4,400. That’s over $1,000 a month, up close to 3% at the start of the year.
“Many sellers aren’t able to get the price they want because buyers don’t want to compete with other offers when mortgage rates double from a year ago,” said Seattle Redfin agent David Palmer. “That means fewer sellers are listing their homes and fewer buyers are placing offers on the ones that hit the market.”
The firm noted that several cities on the list – including Las Vegas, Phoenix, Sacramento and the North Port – were “transfer hotspots” during the pandemic-era shift toward remote work. As monetary policy tightens and more companies return to office, those markets are increasingly cooling.
Additionally, cities with large populations of technical workers are seeing less demand because workers compensation is often tied to stocks – almost all of which are down significantly in recent months.
A growing number of analysts are warning of housing reform. This week, Pantheon economist Ian Shepherdson said that home prices may drop by 20% As soon as the market starts again by the middle of next year.