Bay Area home buyers faced with skyrocketing real estate prices and mortgage costs that have more than doubled over the last year appear to be hitting their limit, pushing more home sellers to do what has become almost unthinkable in the region’s white-hot market: cut prices.
“A lot of buyers are being priced out,” said Nicole Bachaud, a market analyst for Zillow. “Demand is definitely pulling back.”
Average U.S. mortgage rates hit 5.78% last week. With the typical home in the San Jose area valued at $1.7 million in May, the average monthly payment on a new mortgage reached a whopping $9,136 per month — nearly 60% higher than May of last year and more than 5% higher than April of this year, according to Zillow. Typical home values have risen more than 22% in the last year.
