With houses going for well over their asking price, many locals are now being tempted into selling and moving to cheaper spots elsewhere in the state, said Tim Tepes, president of the Greater Lehigh Valley Realtors group. Even as new listings are rising, homes are quickly finding buyers, he said.
McLaughlin said he expects U.S. home-price growth to slow to less than 10% by the end of the year. Demand may also cool as buyers are priced out, especially if borrowing costs start to rise, he said. Federal Reserve officials indicated this week that they expect two interest-rate increases by the end of 2023—sooner than many thought.
“The same force leading to new supply may be the same force that reduces the ability of homebuyers to keep interested in buying the home,” McLaughlin said. “That’s mainly rising prices.”
The market for newly built houses may also be easing. Homebuilders have been jacking up prices because demand was too high for them to keep up with. Now some buyers are feeling a bit of sticker shock, said Ali Wolf, chief economist for Zonda, a homebuilding data provider and consultancy.
About 40% of builders surveyed by Zonda in May listed buyer hesitancy among their challenges, up from about 20% the month before. As a result, the new-home market has gone from “unbearably” hot to just hot, she said.
In Austin, Texas, agents are reaching out to homeowners by phone and text, telling them how much they can make by selling. That message is starting to resonate, said Alex Wright, an agent with Local Life Realty.
Wright, who grew up in the area, says her childhood best friend’s parents, now in their 60s, want to move to the Midwest to be closer to her grandmother. Austin isn’t the same place anymore. It has gotten expensive, and there’s a line for everything from tacos to coffee, not to mention housing, she said.
Wright says her buyers welcome more choice, but winning a home is still a challenge.
“It’s still crazy competitive,” she said.
This article was provided by Bloomberg News.