After two years of record-setting activity, there are beginning to be signs that nationally 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.
Across the country, 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 White House 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.
Locally, a somewhat different picture has emerged for May. Not only did inventory increase, but sales increased as well. When looking at the local market, New Listings in the Chattanooga region increased 9.5% to 1,415. Pending Sales were up 4.5% to 1,162. Inventory levels grew 4.7% to 1,232 units. Prices continued to gain traction. The Median Sales Price increased 21.2% to $315,000. In April, the Median Sales Price was $302,500. Days on Market was down 36.4% to 14 days, which was the same amount of time as April. Absorption rates were even with last year as Months Supply of Inventory remained flat at 1.1 months.
The housing market continues to shift everywhere which is why it is so crucial to utilize the expertise of a Realtor®. Whether you’re buying or selling, or moving locally or across the country, Realtors have the knowledge and tools needed to make sure you are getting the most out of your investment. That’s Who We R®.