For August, higher mortgage rates, along with elevated sales prices and a lack of housing inventory, continued to impact market activity during the summer homebuying season. The average 30-year fixed-rate mortgage has remained above 6.5% since May, recently hitting a two-decade high in August, according to Freddie Mac. As a result, existing-home sales have continued to slow nationwide, dropping 2.2% month-over-month as of last measure, with sales down 16.6% compared to the same time last year, according to the National Association of REALTORS® (NAR).
But falling home sales have done little to cool home prices, which have continued to sit at record high levels nationally thanks to a limited supply of homes for sale. According to NAR, there were 1.11 million homes for sale heading into August, 14.6% fewer homes than the same period last year, for a 3.3 months’ supply at the current sales pace. The shortage of homes for sale has boosted competition for available properties and is driving sales prices higher, with NAR reporting a national median existing-home price of $406,700, a 1.9% increase from a year earlier.
Looking locally, New Listings in the Chattanooga region decreased 11.4% from August 2022 (1,348) to 1,195. Pending Sales were down 8.8% August 2022 (1,030) to 939. Inventory levels shrank 16.3% from August 2022 (2,177) to 1,823 units.
Prices continued to gain traction. The Median Sales Price increased 10.0% over August 2022 ($300,000) to $330,000. Days on Market was up 87.5% from August 2022 (16 days) to 30 days. Absorption rates were even with last year as Months Supply of Inventory remained flat at 2.1 months.
One thing the past few years has shown is that real estate conditions are dynamic and change constantly. Economic trends, interest rates, and local market dynamics can all have a massive and immediate effect. This ever-shifting landscape only serves to emphasize the importance of utilizing the services of a REALTOR®. Realtors possess an in-depth understanding of market fluctuations and can provide invaluable insights to help buyers and sellers navigate these changes effectively. REALTORS® have access to up-to-the-minute data, which helps to advise clients on when to buy or sell to maximize their investments. REALTORS® work for their clients and communities all year long. That’s Who We R.