In some of the nation’s hottest housing markets, housing prices climbed by more than 30% this year. While prices are continuing to rise across the country, there are signs that steep price jumps are moderating.
The median home list price has held steady over the past four months at around $380,000, according to realtor.com®.
Also, the number of homes with price cuts has more than doubled compared to a low set in February. And homes also are taking slightly longer to sell, increasing from a low in June of 37 days to 45 days in October, realtor.com® reports.
“Prices and sellers reached for the moon this year,” says George Ratiu, director of economic research at realtor.com®. “It looks like we are now about to move back to Earth.”
Economists are predicting more homes to enter the market, which could help alleviate the pressure on home prices.
Typically, the housing market starts to slow during this time of year. However, contract signings remained high this fall, climbing 7.5% in October, while home sales for 2021 are on pace to hit a 15-year high, the National Association of REALTORS® reported Monday.
Lawrence Yun, NAR’s chief economist, forecasts that home prices will increase at a “gentler pace” over the next several months and expects demand to be milder as mortgage rates increase. The 30-year fixed-rate mortgage averaged 3.10% last week, up from a 2.72% average a year ago, Freddie Mac reports.
“The pool of buyers who can continue to push prices higher from here is a lot smaller than it was last year,” Ali Wolf, chief economist at Zonda, a national building consulting firm, told realtor.com®. “We’re past the point of anything goes in the housing market. We’re not going to see the same level of home price growth. You won’t have to remove all the contingencies just to win a home.”