From the WSJ:
After a yearlong rally, the U.S. housing market is showing signs of cooling as higher prices and interest rates, a slowdown in investor purchases and shortages of homes for sale weigh on one of the economy’s brightest sectors.
While few economists and industry watchers believe the housing recovery will stall, there is growing evidence that the exuberance that prompted bidding wars and led to double-digit price gains is easing. Redfin, an online real-estate brokerage, said its agents had multiple bids on 61% of its homes in August, down from 76% in March.
“It’s clear there will be some moderation in demand,” said Lawrence Yun, chief economist for the National Association of Realtors. He noted that the use of electronic “lockboxes” used by listing agents, an indicator of foot traffic at homes on the market, showed a “measurable decline” during August.
Another measure of home-buyer traffic maintained by Credit Suisse showed traffic fell in August to its lowest level since December 2011.
Some closely watched measures of housing activity, including sales of previously owned homes, may not yet capture the full extent of any slowdown, in part because they measure sales that went under contract earlier in the summer when activity was still robust. The Realtors group is set to report Thursday on existing home sales for August, which will show completed sales of homes that went into contracts one to two months earlier.
The consensus of economists surveyed last week by Dow Jones Newswires estimates that the pace of sales fell to a 5.24 million seasonally adjusted annual rate in August, down about 3% from July but ahead of last year’s 4.84 million.
Some agents say the biggest problem in the market is “seller greed”—that is, sellers pricing their homes too high, said Jim Klinge, a real-estate agent in Carlsbad, Calif. Faced with rising rates, buyers aren’t going for higher prices. “They don’t realize our 12- to 18-month full-tilt boogie is over,” he said.