AUSTIN (KXAN) — Real estate brokerage Redfin says they see housing demand starting to cool across the country, thanks to soaring mortgage rates — but not yet in Austin.
Redfin said mortgage rates were rising at their fastest rate in history, meaning a typical monthly payment has increased by more than $500 since the start of this year.
The company said that right now many homebuyers are trying to lock in their rate before it gets higher, but they expect buyers to pull back as rates approach 5% and exceed their budget.
They said there were signs that change was already underway.
“We’re starting to see some early warning signs of lower demand – less searches for homes to buy, less tourist activity and also a few more price drops than we’ve seen…at the moment. same time last year,” said Daryl Fairweather, Redfin’s chief economist.
This is not yet the case in Austin.
“Austin is a bit of a special market because there are so many people coming from more expensive areas like San Francisco, Los Angeles, New York,” Fairweather explained.
She said currently house prices are up 22% and she expects that to come down, but it could go down to 10% growth, which is still a lot for any market. .
“The housing market was just on fire earlier this year … with many homes costing hundreds of $1,000 above asking price,” Fairweather said. “I think we’re going to hear less and less of these anecdotes and things are going to get a little more down to earth.”
She expects that to happen in the next few months, but said that doesn’t mean it will be easy for Austin shoppers – they’ll still face a ‘good dose’ of competition with so many new arrivals. With rising mortgage rates, it will cost you more to finance your home.
But, Fairweather said, buyers may not need to “go all out to win a home.”
This is a developing story. Check back for updates.