Tags: Housing | market | fizzles | boom

Housing Boom Fizzles in Some Hot Markets

By    |   Monday, 25 Nov 2013 07:23 PM

Soaring home prices and rising mortgage rates are cooling things down in some American cities that enjoyed the strongest housing booms during the past 18 months, according to a Wall Street Journal survey of 28 major metropolitan areas.

In the year through September, home prices surged more than 33 percent in Las Vegas and Sacramento, Calif., and more than 20 percent in San Francisco, Phoenix, San Diego, and Orange County, Calif., according to Zillow.

But in the final three months of that period, prices gained only 1 percent in Orange County, 2 percent in San Diego and 3 percent in San Francisco.

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At the same time, 30-year fixed-rate mortgage rates jumped to 4.22 percent last week from 3.35 percent in early May, according to Freddie Mac.

"There's been a great deal of sticker shock," John Wheaton, vice president of mortgage lending at Guaranteed Rate in Costa Mesa, Calif., told The Journal.

"We're seeing more price reductions than we are price increases" in Southern California, he said.

Meanwhile, housing inventories are starting to rebound. Nearly half of the 28 areas in The Journal survey experienced a year-on-year increase in inventories during September.

Nationally, home sales slid 3.2 percent in October to the lowest rate in four months.

"The housing data has downshifted in recent months, presumably because of the pop in mortgage rates beginning in the spring,” Thomas Simons, an economist at Jefferies LLC, told Bloomberg. "Low inventories may also be impeding sales."

Editor’s Note: Seniors Scoop Up Unclaimed $20,500 Checks? (See If You Qualify)

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Soaring home prices and rising mortgage rates are cooling things down in some American cities that enjoyed the strongest housing booms during the past 18 months, according to a Wall Street Journal survey of 28 major metropolitan areas.
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2013-23-25
Monday, 25 Nov 2013 07:23 PM
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