The market has reached historic highs in recent years, and if you're considering jumping in you want to watch for signs that indicate market status. If you see the following signs, expect the market to cool down.
If the sales rate is slowing down, even if it's still high overall, it can be a sign that the market is cooling off. This means that sellers don't see the same opportunities they did when the market was hot, and that homeowners might be more open to lowering prices.
The National Association of Realtors' website is a good start when you want to see how sales are doing.
Low inventory heats the market because it forces home buyers to bid against each other on a limited number of houses because the supply is too low to meet demand. As inventory increases in many places, supply and demand begin to even out, and home buyers have more options. When buyers can wait to see what comes on the market, it reduces the number of offers on each home.
Increasing Mortgage Rates
Mortgage rates increasing are not only a sign that the market is cooling but also a cause of it. As interest goes up, fewer buyers can afford to purchase a home and others may decide to wait to see if the interest rates go down rather than purchasing a smaller house than they could originally afford.