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.
New Listings were down 24.8 percent for single-family homes and 30.4 percent for Condo/TIC/Coop properties. Pending Sales decreased 22.5 percent for single-family homes and 29.3 percent for Condo/TIC/Coop properties.
The Median Sales Price was up 6.8 percent to $2,015,000 for single-family homes but decreased 0.2 percent to $1,225,000 for Condo/TIC/Coop properties. Months Supply of Inventory decreased 32.0 percent for single-family units and 15.9 percent for Condo/TIC/Coop units.
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.