Real Estate Market Cooling Off?

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Several signs showing a possible 1real estate 2cooldown, just as the market enters its hottest, busiest summer season.

¡°This is when the largest majority of buyers are looking to buy and in the real estate market buyers drive the market.¡±

The buying 3frenzy for those few available homes could soon be 4declining. According to Freddie Mac, 5mortgage rates increased by more than half a percentage point last week... the biggest one week jump since 1987. The 30-year 6fixed-rate mortgage jumped to nearly five point eight percent in the week ending June 16. For comparison, rates were under 3 percent the same time last year. That makes homes even more expensive for those who need to take out a loan to buy and that could lower demand.

¡°The question on everybody¡¯s mind is will these interest rate hikes slow the market down so much that prices drop? And unfortunately, the only way that that would happen is if it pushed enough buyers out of the market, that the demand for the existing supply decreased. And that¡¯s not what we¡¯re seeing.¡±

The average mortgage rate increase follows last week¡¯s 7Fed interest rate hike. And major layoffs at two US real estate companies. Redfin is cutting 8 percent of its staff as its stock is down 80 percent this year. And Compass laying off 10 percent of its staff citing ¡°clear signals of slowing 8economic growth.¡± So, what does this all mean for first-time home buyers?

¡°Even though we¡¯ve seen a rate hike, it¡¯s going to get even worse. So, if you¡¯re waiting to buy real estate because you think it¡¯s 9unaffordable, it might become even more unaffordable as they continue to raise rates.¡±

Article from https://cnn.ybmnet.co.kr/cnn_class/2464