U.S. Housing Market Could be Headed for Broadest Slowdown in Years
December 10, 2018
Ask any Millennial who’s been looking to purchase a house about how frustrating home bidding wars are getting, especially in cutthroat areas of the country such as Seattle, Silicon Valley, and Austin, TX. I heard of one couple in Seattle who were only in their late 20s but had already lost two bidding battles and were ready to renew their current apartment lease. Then, in May, their agent called. Something had changed in the air. Sellers started to get jumpy, even in the hottest markets. Homes that used to vanish in days were sitting unsold for weeks. So this Seattle couple ended up getting a three-bedroom, 2 bath fixer-upper just north of the city at list price of $550,000 (down from $600,000 original listing). They closed on the house by the end of June.
All the signs are showing the U.S. housing market could be headed for the broadest slowdown in years. Home prices are climbing about twice as fast as income is and buyers are getting squeezed by rising mortgage rates.
“This could be the very beginning of a turning point,” said Robert Shiller to Bloomberg News. Shiller is a Nobel Prize-winning economist who is famed for warning of the dot-com and housing bubbles, in an interview. He stressed that he isn’t ready to make that call yet.
A slew of figures released recently give ample evidence of at least a cooling.