It could be more listings on the market, or perhaps just fear that interest rates will move even higher, but homebuyers are showing more demand for mortgages. They are, however, turning even more to adjustable-rate mortgages (ARMs), which offer lower rates. That gives them an advantage as both rates and home prices continue to climb.
The most competitive housing market ever is finally showing signs of breaking.
As data trickles in for April, itās becoming clear that the historically hot housing market has flipped trajectories. Itās now in cooling mode. The number of homes listed for sale is rising again. Fewer shoppers are scheduling tours. And Redfin reports 15% of home sellers in April cut their asking priceāup from 9% a year ago.
āThe red-hot housing marketās days are numbered. While I donāt anticipate a collapse Ć” la the Great Recession, rising mortgage rates and inventory are sure to cool what has been an unprecedented time for the U.S. housing market,ā says Ralph McLaughlin, chief economist at Kukun, a real estate data and analytics company.
Mortgage applications to purchase a home rose 5% last week compared with the previous week, according to the Mortgage Bankers Associationās seasonally adjusted index. Demand was still 8% lower than the same week one year ago, but that annual drop is now shrinking.
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