Rising inflation, soaring home prices, and increased mortgage interest rates
have combined to cause a slowdown in the U.S. housing market. To help quell
inflation, which reached 8.6% as of last measure in May, the Federal Reserve
raised interest rates by three quarters of a percentage point in June, the
largest interest rate hike since 1994. Higher prices, coupled with 30-year fixed
mortgage rates approaching 6%, have exacerbated affordability challenges
and rapidly cooled demand, with home sales and mortgage applications
falling sharply from a year ago.*
Closed Sales decreased 10.2 percent for existing homes and 5.3 percent for
new homes. Pending Sales decreased 2.3 percent for existing homes and
30.5 percent for new homes. Inventory decreased 9.2 percent for existing
homes but increased 53.1 percent for new homes.
The Median Sales Price was up 14.9 percent to $300,000 for existing homes
and 17.9 percent to $516,602 for new homes. Days on Market decreased 7.7
percent for existing homes and 15.1 percent for new homes. Supply
decreased 9.1 percent for existing homes but increased 85.7 percent for new
homes.
With monthly mortgage payments up more than 50% compared to this time
last year, the rising costs of homeownership have sidelined many prospective
buyers. Nationally, the median sales price of existing homes recently
exceeded $400,000 for the first time ever, a 15% increase from the same
period a year ago, according to the National Association of REALTORS®. As
existing home sales continue to soften nationwide, housing supply is slowly
improving, with inventory up for the second straight month. In time, price
growth is expected to moderate as supply grows; for now, however, inventory
remains low, and buyers are feeling the squeeze of higher prices all around.
*Information and stats courtesy of KCRAR and Heartland MLS.