5 markets where home sales are cooling fastest

Stockton, California

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After the frenzy of bidding wars, the U.S. housing market is starting to cool, particularly along the West Coast, as mortgage interest rates rise. That’s forcing some sellers to adjust.

“Sellers have to be more realistic,” said Bill Kowalczuk, real estate broker at Coldwell Banker Warburg.

Several Western markets are cooling fastest, with San Jose, California, topping the list, according to a new Redfin analysis based on median sales prices, inventory changes and other housing data from February to May.

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Low mortgage rates in recent years had fueled demand in many markets, causing some to overheat, explained Redfin’s chief economist, Daryl Fairweather.

“Those markets have had more of a swift return to Earth now that mortgage rates are high,” she said.

While 30-year fixed-rate mortgage interest rates were around 3% at the end of December, those rates have jumped to nearly 6% as the Federal Reserve hikes its benchmark rate to fight rising inflation.

5 U.S. housing markets cooling the fastest

5 U.S. housing markets cooling the slowest

Advice for sellers: Be strategic when pricing your home 

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