After two years of record-setting activity, there are signs the housing market
might be cooling. High home prices and a surge in mortgage interest rates are
slowing buyer activity, with home sales declining for the third consecutive
month under the weight of soaring homeownership costs. The National
Association of REALTORS® (NAR) reports existing home sales were down
2.4% from the previous month, while pending sales fell 3.9% as of last
measure, extending the trend of recent months. Economists predict sales will
continue to soften in the near future, which may put downward pressure on
home prices.
Closed Sales increased 1.4 percent for existing homes and 0.3 percent for
new homes. Pending Sales decreased 5.7 percent for existing homes and
13.3 percent for new homes. Inventory decreased 16.2 percent for existing
homes but increased 31.8 percent for new homes.
The Median Sales Price was up 11.8 percent to $285,000 for existing homes
and 12.5 percent to $494,900 for new homes. Days on Market decreased 7.1
percent for existing homes and 11.6 percent for new homes. Supply
decreased 20.0 percent for existing homes but increased 60.0 percent for new
homes.
The slowdown in sales has provided a much-needed lift to housing supply,
with inventory up 10.8% from the previous month according to NAR, although
supply remains down 10.4% compared to this time last year, with only 2.2
months’ supply of homes at the current sales pace. As the nation continues to
explore ways to solve the ongoing housing shortage, estimated at 5.5 million
homes, the Biden administration recently unveiled the Housing Supply Action
Plan, which aims to expand housing access through a number of
administrative and legislative actions and help relieve the nation’s housing
crisis over the next 5 years.
*Information and stats courtesy of KCRAR and Heartland MLS.