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The president of the New Orleans Metropolitan Association of Relators (NOMAR) said there are more homes on the market in the New Orleans area than there have been in the past two years. (Fox News / Fox News)
If you’re looking to buy a home soon, you’re in luck. After two years of record sales, data shows the housing market is starting to cool, but there’s a catch.
For the first time since March 2021, the average home is selling for less than its list price, but high mortgage rates are still affecting people’s affordability.
Mortgage rates are at their highest in 14 years, reaching nearly 6%, according to real estate company Redfin.
“This is the strongest reversal in the housing market since the housing market crash in 2008,” said Daryl Fairweather, Redfin’s chief economist.
MORTGAGE INTEREST RATES REACH THE HIGHEST LEVEL SINCE 2008
While selling prices are still higher than 2021, inflation and high interest rates are cooling the market. (Source: RedFin / Fox News)
While home prices are still higher than a year ago, with the average home now selling for just under $370,000, inflation and high interest rates are holding back the market.
“We haven’t seen interest rates that high since 2008, 2007, so it’s a big change from the housing market that we’ve all become accustomed to,” Fairweather said.
With these higher interest rates, mortgages are up about 40% year over year.
“Buyers just don’t have the 40% extra cash to put into homebuilding every month,” Fairweather said. “Many homebuyers have had to get out and go into the rental market instead, or choose not to buy that second home or investment property.”
Redfin said larger cities like San Francisco and Los Angeles are seeing the biggest impact.
“If you’re talking about a $1.5 million house, that’s an extra thousand dollars a month for a mortgage payment.”
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Despite higher mortgage rates, real estate experts say now is still a good time to buy. (Fox News / Fox News)
In New Orleans, Metropolitan Association of Relators President David Favret said there were more homes on the market in his area than in the past two years.
“I think both buyers and sellers are in a good position right now,” Favret said. “Sellers are still seeing a premium even though prices have eased slightly, but there are plenty of buyers who are still there, particularly those who may have been sitting on the sidelines when the market was tighter.”
INFLATION RISE FASTER THAN EXPECTED IN AUGUST, KEEPING PRICES PAINFULLY HIGH
While the seller’s market could be as competitive as it was earlier this year, Favret said now is still a good time to sell.
“If your property is reasonably priced, you will be very successful,” Favret said.
Redfin also said now is still a good time to buy if you qualify for a mortgage because you can always refinance if mortgage rates go down again.
“If you can find a home that meets all your needs and you want to stay in it for at least 5 years, it’s still a good time to buy,” Fairweather said.
When asked if we could enter another housing crisis, Redfin said it was unlikely.
“People who currently own a home are generally in a good financial position,” Fairweather said. “The criteria for getting a mortgage are really high. It’s not like the real estate crash when people got mortgages they shouldn’t have.”
Fairweather said that as we enter another recession, homebuyers will need to consider whether they can still afford their home if they unexpectedly lose their job.
Get the latest updates on this story at FOXBusiness.com.