Yahoo Finance reporter Ronda Lee details a new report finding that homebuying bidding wars are cooling down yet again amid higher mortgage rates.
RACHELLE AKUFFO: All right, shifting gears. Another sign of a slowdown in the housing market. A new report from Redfin shows bidding wars are cooling off amid higher mortgage rates. Yahoo Finance reporter Ronda Lee is here with the details. Hi, Ronda.
RONDA LEE: Hi. While this may be a bit of good news for buyers, a separate report is showing that home affordability is at its worst level in decades. So let's look at this full scale. Let's go back to January. In January, around about February, we talked about this is an abnormal housing market. It's because of the pandemic. This was not supposed to happen. It's like that going out of business sale. So if you didn't get in on this market in 2020, 2021, you were missing out.
By March, Bank of America comes out with this note-- worst housing market for affordability, first-time homebuyers, entry level people being moved out. In April, we put out an article-- home buyers, be ready to be disappointed. May, we put out a different article-- signs that the housing market is cooling off. So by May, all of these things were there.
We started talking in June, we started talking about, hey, you know what? Cash offers, we're not seeing that so much. And we're seeing a slowdown when it comes to these bidding wars. So sellers, you might want to take note. Unfortunately, a lot of people were like, we're good. And then we come to July, and everything is like, home buyers are canceling their contracts. We're talking about these would-be homebuyers entering the rental market, flooding the rental market, rent's too damn high. And here we are today.
AKIKO FUJITA: Always paints a positive picture for us, Ronda. You know, so we're talking about affordability. It's certainly been a key issue as we've seen those mortgage rates go up, too. If those bidding wars are starting to cool down, what does that mean from an affordability standpoint?
RONDA LEE: It's still not good because entry level and first-time home-- would-be homebuyers were priced out back in March, in February. So they were out of the market back then for most areas. Now there are a few areas where you probably could, but that's not the situation for most homebuyers. So they were already out of the market. They-- then so you have those people being pushed out come into the renter's market.
The people who can afford to buy now, the good thing is they might see some price drops. There's less competition. But they still have to figure out we're talking about a recession. Do you really want to buy? Right now, we're not sure what's happening. We already have inflation with the gas and groceries. So these are things that people are considering. For those who are still in the market, maybe they're going to hold back because people talk in 2023, there's a recession.
AKIKO FUJITA: Yeah, sentiment certainly going down, although at least what we heard today points to the fact that consumer sentiment hasn't dipped to where it was a few months ago. We'll continue watching that. Ronda, as always, appreciate--