Housing markets across the nation are most assuredly active this summer, and buyer competition is manifesting itself into several quick sales above asking price. While the strength of the U.S. economy has helped purchase offers pile up, the Fed recently increased the federal funds rate by 0.25 percent, marking the second rate hike this year and seventh since late 2015. Although the 30-year mortgage rate did not increase, buyers often react by locking in at the current rate ahead of assumed higher rates later. When this happens, accelerated price increases are possible, causing further strain on affordability.
Closed Sales decreased 5.9 percent for existing homes and 6.1 percent for new homes. Pending Sales increased 8.0 percent for existing homes but decreased 5.8 percent for new homes. Inventory decreased 9.4 percent for existing homes but increased 4.7 percent for new homes. The Median Sales Price was up 5.7 percent to $200,895 for existing homes and 2.4 percent to $364,975 for new homes. Days on Market decreased 15.0 percent for existing homes and 11.4 percent for new homes. Supply decreased 8.7 percent for existing homes but remained flat for new homes.
Inventory may be persistently lower in year-over-year comparisons, and home prices are still more likely to rise than not, but sales and new listings may finish the summer on the upswing. The housing supply outlook in several markets is beginning to show an increase in new construction and a move by builders away from overstocked rental units to new developments for sale. These are encouraging signs in an already healthy marketplace.
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*Information provided courtesy of KCRAR and Heartland MLS