The housing market correction has begun, and it will likely get worse before it gets better, according to a new article in Fortune.
The article cites data and analysis by real estate brokerage Redfin, which has been reporting big drops in demand and price cuts spreading throughout the nation, including in some of the hottest markets.
According to its June 23 Homebuyer Demand Index, the market posted a year-over-year decline of 16%—the largest decrease in over two years—as mortgage rates hit 6%.
“The market was still quite hot with lots of bidding wars, and it was still very common for homes to go above asking price,” Redfin’s chief economist Daryl Fairweather told Fortune in an interview.
Fairweather also said that sellers don’t need to be in the market right now, as many received “record equity” last year because of the increase in home values. And while economists aren’t predicting another 2008, it’s apparent that the market is cooling as prices in former hot spots like Sacramento and Austin are falling after seeing increased demand and prices over the past two years, according to the article.
Metros in Utah saw the biggest price drops, according to a report by Redfin.
Now the question is, how much cooling will the market do, and how fast? Economists are predicting, at the very least, that prices will continue to drop in most markets.