Are house prices about to plummet?
Mortgage rates are heading higher. They’ve doubled from 3% in January to more than 6% today.
The red-hot housing market is definitely cooling. Prices are coming down 5 to 10% in some locations, and 25% of homes on the market have cut their prices.
“It’s changing week to week now. Every time interest rates go up, people stop coming,” Los Angeles realtor Lindsay Katy said. She slashed the price of one of her listings by $40,000.
“We went into escrow I think about a week after we lowered the price. The open houses aren’t as busy as they were,” Katz said.
Some experts say that prices might not fall further, because inventory is very low.
“There’s less than two months worth of inventory in most of the towns that people are attracted to. Because of that, it is still a seller’s market,” real estate broker James Hughes said.
Meanwhile, more than two-thirds of economists surveyed by Fortune Magazine predict there will be a recession, thanks to higher energy prices and the global impact of the war in Ukraine.