The housing market is cooling. What’s it like in your area?

After spiraling to new heights during the pandemic, the housing market is finally starting to cool. Data on how fast homes have sold over the past decade shows how the market took off in the summer of 2020 and began to wind back down this spring.

Percent of homes that sold within two weeks, starting in Jan. 2012

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Throughout 2012, about 30 percent of homes sold within two weeks.

The rate increased in early 2013.

Homes typically sell fastest in the spring ...

... and slowest in the winter.

Everything changed in 2020 when the covid-19 pandemic began.

The market initially tanked ...

... but it soon soared higher ...

... and higher.

This spring, the market began cooling.

It now sits at its pre-pandemic pace.

“Affordability challenges are the main driver of the housing slowdown,” said Jeff Tucker, senior economist at Zillow.

Buyers are pulling back from the market as monthly mortgage payments climb out of reach for many households. In turn, that’s putting pressure on sellers to cut their prices, accept lower offers or rent their homes rather than list them for sale. Both buyers and sellers are expressing uncertainty about where home values will settle.

[Calculate how much more mortgages will cost as interest rates rise]

A cooling market does not necessarily mean lower home prices — just that they are rising more slowly. The median price per square foot in August was still 9 percent higher than a year ago. But the price growth has slowed: In February prices were 18 percent higher than the year prior.

Just as certain parts of the country saw an explosion of house-hunting interest, triggering intense bidding wars and a shocking run up in prices during the pandemic, many of those same regions are now experiencing a comedown. And the cool-down is not geographically uniform.

“The regional housing markets that got the most overheated have the most to cool off,” said Eric Finnigan, director at John Burns Real Estate Consulting.

Ali Wolf, chief economist at Zonda, said markets that offered an escape and change of scenery during the early pandemic period were a magnet to new residents from around the country. Cities in the Southeast, Southwest, Mountain West, and suburban California were considered pandemic “winners” because of the massive influx of demand. But as interest rates continued to rise, buyers found themselves priced out of the market, Wolf said.

Now those same housing markets are cooling as the number of homes for sale, days on the market and price are no longer on a rapid ascent.

“The markets that grew the most and the quickest were also the markets that became victims of their own success in 2022,” Wolf said.

About this story

Illustration by Alexis Arnold. Editing by Kate Rabinowitz and Karly Domb Sadof.

Data is from Redfin. The overall cooling rank incorporates six metrics: median price per square foot, percent off market within two weeks, sale-to-list price ratio, the number of pending sales, the number of price drops, and inventory. Each county was ranked by how each metric’s year-over-year figure changed since February — in other words, how the pace of the metric changed. Those rankings were then combined to create the overall ranking shown on the map. The data is for all residential property types and not seasonally adjusted.