By Nick Timiraos and Conor Dougherty | The Wall Street Journal
After a yearlong rally, the U.S. housing market is showing signs of cooling as higher prices and interest rates, a slowdown in investor purchases and shortages of homes for sale weigh on one of the economy’s brightest sectors.
While few economists and industry watchers believe the housing recovery will stall, there is growing evidence that the exuberance that prompted bidding wars and led to double-digit price gains is easing. Redfin, an online real-estate brokerage, said its agents had multiple bids on 61% of its homes in August, down from 76% in March.
“It’s clear there will be some moderation in demand,” said Lawrence Yun, chief economist for the National Association of Realtors. He noted that the use of electronic “lockboxes” used by listing agents, an indicator of foot traffic at homes on the market, showed a “measurable decline” during August.
Another measure of homebuyer traffic maintained by Credit Suisse showed traffic fell in August to its lowest level since December 2011.
