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Jake Krimmel reports cooling U.S. housing market as high mortgage rates and increased inventory drive price reductions.

The U.S. housing market is cooling as it transitions into the fall season, with home sellers increasingly lowering asking prices to attract buyers. A Realtor.com analysis found that the median listing price per square foot decreased by 1.8% nationwide in August, marking the 10th consecutive month of annual declines. This trend is particularly evident in metro areas that experienced rapid growth during the pandemic, such as Austin, Tampa, and Denver, where sellers are giving back pandemic-era gains as inventory levels rise. High mortgage rates, which reached a 13-month high of 6.71 percent in early September, are the primary driver of the slowdown. These rates have pushed the typical monthly mortgage payment up 2% to $1,897, creating affordability challenges for many households. While home sales fell 0.6% year over year in August, the share of listings with a price cut rose to 26.3%. Despite the price drops, some markets remain competitive. In San Francisco, the median listing price per square foot fell 3.9% while active listings dropped 16.3% in July, indicating that while prices are adjusting, demand remains high for specific types of inventory.

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