Redfin also analyzed and ranked the 100 largest U.S. metropolitan areas based on numerous metrics (e.g., home prices, price declines, home sales velocity) from February to August 2022. Here are the 10 areas in the U.S. where real estate cooled the fastest from February to August.

Although home prices are now much higher than they were before the epidemic, they are now starting to fall as demand decreases and listings increase.

This is certainly good news for people looking to buy a home, but while home prices are starting to fall, they are still well outside the budget range of many home buyers.

Mortgage rates have been rising so far this year. Compared to the beginning of the year, if you take out a mortgage to buy a home now, you could be paying $1,000 more a month in monthly rent. On top of that, there is a large home maintenance cost after you buy a home, such as home insurance, property taxes, and various maintenance fees.

One industry expert warned that soaring mortgage rates could reach double digits in 2023 even if the Federal Reserve stops raising rates sharply.

Whalen Global Advisors (Whalen Global Advisors) chairman Christopher Whalen (Christopher Whalen) said in an interview that the Fed's rate hikes have a lag effect on home loans, meaning that the housing market will not be fully affected in the weeks or months following each rate hike.

Recently, the Fed has been raising its benchmark interest rate sharply in an attempt to cool the economy and curb high inflation. While this does not directly affect mortgages, interest rates tend to rise as the policy tightens, causing the cost of home ownership to continue to rise for buyers.

The latest data from Freddie Mac shows that the 30-year fixed rate reached 6.94% this week. The rate has more than doubled since January of this year and is expected to continue climbing.

Investors expect a more than 95 percent chance of a fourth consecutive 75-basis-point rate hike when the Fed meets Nov. 1-2. Not only that, but the agency is expected to raise rates sharply again at its December meeting.

Eventually, the Fed's benchmark interest rate is expected to rise to 4.75% ~ 5%, much higher than the current 3% ~ 3.25% level. The pace of tightening is even more pronounced than last year when rates were close to zero at this time.

Mortgage rates have more than doubled so far this year, and the calculus for homebuyers has changed dramatically. The median monthly mortgage principal and interest payment on the median price of a home has increased by $930, or 73 percent, from a year ago.

Given soaring mortgage rates, as well as soaring home prices and the absence of fast-growing wages, it's harder to buy a home now than it was decades ago.

Economists at Goldman Sachs predict that home prices will fall about 5 to 10 percent from their June peak.

Wells Fargo also recently predicted that the national median price of a single-family home in the U.S. will fall 5.5 percent year-over-year by the end of 2023.

Economists also predict that home prices will rebound and rise again in 2024, with median home prices rising 3.3 percent by the end of 2024.