Many home sellers admit they overestimated the U.S. housing market, which has begun cooling after five years of record-breaking sales and double-digit price appreciation.

Sales of existing homes were 5.7 percent slower in April with mortgage rates rising than they were a year earlier, and the inventory of new homes is at a record high. The rising supply of unsold homes makes it that much harder for homeowners to get the sale price they hoped for.

Cincinnati real-estate agent Jeff Schnedl has seen a shift in the market. He said that the market is absolutely slower. A drive down any street in Cincinnati, whose suburbs straddle Ohio, Kentucky and Indiana, turns up plenty of "For Sale" signs -- with the occasional "Price Reduced" addendum slapped on top.

Schnedl said homes are staying on the market longer. That is why buyers have more homes to choose from and that slows the sale cycle down. Plus with rising interest rates, people are thinking harder. According to mortgage finance company Freddie Mac,  the average rate on a 30-year fixed mortgage rose to 6.63 percent last week, up a full percentage point from 5.63 percent last year.

Home builders also feel the housing slowdown. While housing starts rose 5 percent in May, permits for future groundbreaking -- an indication of builder confidence -- dropped to the lowest level since 2003, government figures showed this week.

In Cincinnati, builders have felt the chill already. Dan Dressman, executive vice-president of the Home Builders Association of Northern Kentucky, which represents about 1,280 building companies, said that the market has slowed a bit -- not to a screeching halt, but some momentum is not there

By M. Sese
http://realestatepress.org