5 signs the housing market is starting to slow down

There is a shift happening in the housing market.

After more than a year of soaring demand, exploding home prices and increasing real estate sales, the market finally seems to be cooling off.

“The housing market isn’t crashing, but it is experiencing a hangover as it comes down from an unsustainable high,” said Taylor Marr, Redfin deputy chief economist.

Mortgage rates have increased more than two and a half percentage points this year. And the higher costs of financing a home have changed the calculations for many would-be homebuyers. As a result, year-over-year home sales have been dropping in recent months.

In a Fannie Mae survey on homebuyer sentiment, a record 79% of respondents said it’s a bad time to buy a home.

“While a lot of home sellers are already dropping their prices, more homeowners will likely decide to stay put now that the mortgage rate on a new home is significantly higher than their current one,” said Marr.

While the market is still very strong by historical standards, here are five reasons to believe the tide is turning.