Some real estate markets cool as mortgage rates hit 20-year highs

Burbank — Inflation, soaring mortgage rates and record prices are making it difficult for many Americans to buy a home. But there could be some relief in sight as rates soar helped to cool some of the fastest growing real estate markets in the country.

According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage is now at 6.92%, the highest since 2002, and more than double what it was just a year ago . Housing affordability is down 29% from a year ago, according to the National Association of Realtors. Steady rise in rates of the Federal Reserve are also putting pressure on the real estate market.

Nationally, home prices have soared 43% in two years, according to the S&P CoreLogic Case-Shiller Index.

But now, in cities that have seen these massive spikes, prices are falling.

“We’ve seen mortgage rates double this year alone. And in some markets, we’re starting to see prices come down from those dizzying levels,” said CBS News business analyst Jill Schlesinger.

The fastest cooling markets are Seattle, Las Vegas, San Jose, San Diego, Sacramento and Denver, according to S&P. The strong supporters are Chicago, Albany and Milwaukee.

“A year ago, people were buying homes without seeing them, with multiple offers,” Los Angeles real estate agent Craig Strong told CBS News. “It’s a good time to make an offer on a house at a lower price.”

Strong said buyers and sellers need to adapt to changing market conditions, especially during the traditional fall home sales slowdown.

“It’s just an evolving market,” Strong said. “2008 was a hard landing. But I think it’s going to be a softer landing. It’s going to be over a period of time as people adjust to the new tariffs and the new purchase price. ”

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