Even though mortgage rates are around the lowest they've been in three years, buyers are suddenly much more cautious about purchasing a home. Competition is cooling, and consequently sellers can no longer command any price.
Consumer sentiment in housing did improve in August, according to a monthly survey from Fannie Mae. But that's only because of a big jump in the share of those who think mortgage rates are going to continue to fall. There are other signs that the housing market is cooling.
For instance, just more than 10 percent of offers written by Redfin in August faced a bidding war, according to the brokerage’s monthly survey. That is down from 42 percent a year ago. The supply of homes for sale is growing in the midrange and higher end, but it is still tight at the entry level.
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