David Rider | Getty Images
After staggering growth during the pandemic, the US housing boisemarket is starting to cool down – and it’s happening fastest along the West Coast.
The fastest cooling real estate market is San Jose, California, a . According to new redfin analysisWhich ranked US metropolitan markets between February and May 2022 based on average selling prices, year-over-year inventory changes, and other factors.
Six of the top 10 markets are in California, three of which are in the Bay Area, and four other western cities are off the list.
More from Personal Finance:
Experts tackle three tricky questions about Series I bonds
If You’re Moving to a New Job, Don’t Forget About Your 401(k)
These 4 mid-year tax strategies could reduce next year’s bills from the IRS
By comparison, Albany, New York, was the slowest-cooling housing market, followed by El Paso, Texas and Bridgeport, Connecticut, Redfin’s analysis found.
Melissa Cohn, regional vice president at William Revis Mortgage, said rising interest rates have triggered the “affordability factor” as one of the top reasons for the nationwide cooling.
In fact, expensive areas like Northern California, where homes can easily sell for $1 million to $1.5 million or more, have hit 30-year term mortgage rates closer to 6%, the report found.
For example, if you’re buying a million-dollar home with a 20% down payment, your monthly mortgage payment could be about $5,750 with a 6% interest rate, depending on taxes and homeowner’s insurance. . , which ranges from 3% to $1,400. Reported interest rate
According to Redfin, and their average selling price as of May 2022, here are the US markets that have cooled the most over the past year.
- San Jose, California – $1,560,000
- Sacramento, California – $610,000
- Oakland, California – $1,070,000
- Seattle, Washington – $850,000
- Stockton, California – $576,000
- Boise, Idaho – $550,000
- Denver, Colorado – $612,000
- San Diego, California – $875,000
- Tacoma, Washington – $575,000
- San Francisco, California – $1,620,000
According to Redfin, and their average selling price as of May 2022, the US market here has been the slowest in the past year.
- Albany, New York – $289,000
- El Paso, Texas – $238,000
- Bridgeport, Connecticut – $570,000
- Lake County, Illinois – $324,400
- Rochester, New York – $212,100
- New Brunswick, New Jersey – $465,000
- Cincinnati, Ohio – $265,000
- Akron, Ohio – $200,000
- New Haven, Connecticut – $310,000
- Virginia Beach, Virginia – $325,000
While growth may slow down in some markets, experts still do not expect a sharp drop in prices in most markets.
“One of the reasons we have this foamy, overheated market is simply a lack of inventory,” Cohn said.
To that point, in Redfin’s analysis, some increasingly cooling markets Have seen more inventory come to the market. For example, in Seattle, inventory is up 40.9% from last year.
Home prices are still rising, though more slowlyExpectations of one-year average home price growth fell from 5.8% in June to 4.4% in June, according to the Federal Reserve Bank of New York. consumer expectation survey,
Predicting a “healthy normalization” of the real estate market, Cohn said, “the pace of price increases will certainly slow significantly.”
Over the years many buyers have paid cash, with some buyers appraised, inspected or even waived see home in person,
However, changes in the market can give buyers more time to look at properties, make an offer and buy the right home, Kohn said.
If you have recently purchased a home, you may be concerned about the future value of the home, especially in a cold market.
“The good news is that these buyers are locked in the lowest interest rates, so the payments should be more manageable than who bought now,” said Matthew Chancey, a certified financial planner with CoastalOne in Tampa, Florida.
If you bid higher on the property, you could be “underwater” in the short term, meaning you owe more on the mortgage than on the house, he said.
This is not a situation for which you need to rush to remedy. Kyle Newell, an Orlando, Florida-based CFP and owner of Newell Wealth Management, said underwater homeowners should Funnel Extra Cash into Savings For emergencies, such as a potential job loss, instead of rushing to pay off the mortgage.
Experts generally recommend setting aside three to six months’ worth of living expenses. But some advisors offer further suggestions for added flexibility.