The housing market isn’t crashing, but it’s definitely feeling the burn.
After two frenzied years, home buying is cooling off as mortgage rates rise. Some experts in the field are calling it a “housing recession.”
U.S. home values fell in July by 0.1%, compared to the month before, a new Zillow report said.
While deceleration in home-price growth is typical for this time of the year, Zillow noted, the small decline is the first monthly dip since 2012.
The typical U.S. home value fell by $366 in July, and is now $357,107, as measured by the Zillow Home Value Index.
“ Sellers are finding themselves with fewer offers, and are having to offer more concessions themselves to entice buyers.”
Buyers in turn are gaining more options, seeing inventory gradually rise, as the pendulum slowly swings into their direction.
The dip in July is a “badly needed rebalancing that gives home buyers more options, more time to shop and more negotiating power,” Skylar Olsen, chief economist at Zillow
said in a statement.
Homes have become unaffordable for many, given the high prices and mortgage rates. “As prices soften, many will renew their interest, and we will continue our progress back to ‘normal’,” Olsen added.
Home value declines were largest in San Jose, Calif., San Francisco, Calif., Phoenix, Ariz., and Austin, Texas. In these markets, the time listings spend on the market is rising fast.
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