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Redfin’s Chief Economist Predicts That the Housing Market Correction Will Only Get Worse

Following the latest real estate marketing trends can help you boost your business. One of the top trends is the correction that’s been happening in the housing market. Find out what Redfin’s chief economist had to say about this trend.

Housing Market Cooling Down

Redfin reports that the housing market has been slowing down after being hotter than usual during the past couple of years. The company’s Homebuyer Demand Index had a 16 percent year-over-year drop, which was the biggest decrease in the past two years. Even hot markets, such as Austin, are experiencing a slowdown compared to last year. What’s behind this decline?

Rising Interest Rates

Mortgage interest rates have been on the rise in recent months after being at historic lows. Low interest rates led to an increase in demand for housing among buyers. However, as interest rates rise to near 6 percent, this demand has started to fall. Higher interest rates make mortgage payments higher for buyers and limit the inventory in their price range even more. Lower interest rates also led to many homeowners refinancing. With interest rates rising, these homeowners aren’t in a hurry to put their home on the market and purchase a new one.

Listing Price Decreases

What do these trends mean for sellers? As the housing market cools off, sellers are finding that they need to lower their listing prices in order to attract buyers. Unlike the frenzy of the past two years, buyers aren’t showing as much interest in competing for homes that are priced high. Instead, they’re biding their time, causing some sellers to drop their listing price.

If you’re looking for more information on real estate marketing trends, please visit Properties Online. We offer tools that can help real estate agents use these trends to bring in more business.

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