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Among those early tells, according to Redfin: Google searches
for "homes for sale" dropped by double digits in Baltimore,
Boston, San Francisco and Los Angeles in the second week of
March from a year earlier; tours of homes for sale in California
were down 21% as of March 31 from the first week of 2022, data
from ShowingTime shows; Redfin agents in San Francisco, Los
Angeles, Washington DC, Boston and Seattle reported a drop in
requests for homebuying help at the start of this year compared
with last year, even as requests nationwide surged; and agents
in California say they are seeing fewer offers on each home than
previously.
Home prices nationwide have risen about 35% in the two years
since the COVID-19 pandemic slammed the nation and the Federal
Reserve slashed short-term interest rates to near zero, the
Zillow Home Value Index shows.
The Fed last month began raising its policy rate to bring down
decades-high inflation as the economy reopened, and longer-term
borrowing costs have climbed swiftly in anticipation of more
aggressive rate hikes ahead.
The average interest rate on a 30-year-fixed mortgage, the most
popular U.S. home loan, rose last week to 4.9%, a fresh three
year high, data from the Mortgage Bankers Association (MBA)
showed this week.
The U.S. housing market is still hot, however, even in cooling
California cities. The average home in Los Angeles, for
instance, is sold for 5% over its asking price, with a record
share selling within a week of listing, Redfin said.
But the signs are there already, the report said, of a price
slowdown in coming months.
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