Rising supply, waning demand cool United States house bidding wars
An increase in supply of homes and rise in mortgage rates have between them brought an end to the surge in prices in US housing market
Mike Imgarten witnessed a frenzy of demand and a dearth of stock during a two-month house hunt in Sacramento, California.
Sales in Sacramento are now off by more than 25 per cent from a year ago and, while stock remains tight, the supply of homes on the market has almost doubled, according to Erin Stumpf, his real estate agent.
In states such as California, Arizona and Nevada, where bidding wars have fuelled the United States' largest gains in home prices, booming markets are showing signs of cooling as buyers like Imgarten step back. Asking prices in September were lowered on about 25 per cent of listings, the biggest share in two years, while last month they were cut on 23.8 per cent, according to Seattle-based brokerage Redfin, which tracks 22 cities in the country.
The stock of unsold homes in the US climbed in September from a year earlier for the first time since 2011, while contracts to buy previously owned residences plunged the most in three years, according to the National Association of Realtors.
"We are shifting from a frenzy to where buyers are taking a step back and being more analytical and unwilling to just make rash decisions," said Ellen Haberle, an economist for Redfin.