In May, nationally existing home sales slid for the second consecutive month, falling 3.4% as of last measure, the National Association of Realtors reports, as higher interest rates continue to impact buyer affordability.
Sales are down 23% compared to the same period a year ago, while contract signings dropped 20.3% year-over-year.
With sales cooling, buyers in some parts of the country have found relief in the form of declining sales prices, which are down 1.7% year-over-year nationally, although more affordable markets continue to see price gains.
Locally, new listings in the Chattanooga region decreased 19.3% to 1,160. Pending sales were down 19.8% to 897.
Inventory levels grew 12.2% to 1,651 units. Prices continued to gain traction. The median sales price increased 2.5% to $323,028.
Days on market was up 142.9% to 34 days. Buyers felt empowered as months supply of inventory was up 28.6% to 1.8 months.
While fluctuating interest rates have pushed some buyers to the sidelines, a shortage of inventory is also to blame for lower-than-average home sales this time of year, as current homeowners, many of whom locked in mortgage rates several percentage points below today’s current rates, are delaying the decision to sell until market conditions improve.
With only 2.9 months’ supply heading into May, available homes are moving fast, with the typical home spending just over three weeks on the market, according to NAR.
There are positive signs that interest rates might be on the way down. Last week, Dr. Lawrence Yun, NAR chief economist, said this in response to lower inflation rates for May:
“Inflation calmed down in May, and further deceleration looks likely in the upcoming months. It also marks the first month in two years that wage growth outpaced consumer price inflation, improving the average standard of living. Moreover, low inflation means the Federal Reserve should stop raising interest rates and possibly slash rates toward the end of this year or early next year.”
Yun continued, saying the yield on the 10-year Treasury note is responding positively with a rate decline to 3.7%. That normally means the 30-year mortgage rate is around 5.5% to 5.7%.
“Of course, we know the mortgage rates have been near 7% recently, but the potential for a decline is real as we progress through the year,” Yun concluded.
So, if potential homebuyers have been on the fence about entering the housing market, it might be time to take a look at what possibilities are out there. No matter the market, it’s always a good idea to consult the expertise of a Realtor when potentially buying or selling property.
Realtors work for their clients all year long. That’s Who We R.
Founded in 1912, Greater Chattanooga Realtors is the voice for real estate in Greater Chattanooga. A regional organization with more than 2,700 members, Greater Chattanooga Realtors serve Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade, and Walker counties in northwest Georgia. The Association is one of approximately 1,100 local associations/board of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors owns and operates a Multiple Listing Service (MLS), which is one of approximately 600 MLSs in the country and services more than 3,000 MLS users. Local Association membership consists of Realtors servicing the Greater Chattanooga area and specializing in a variety of disciplines – appraisal, commercial, industrial, land, multifamily, property management and residential. Working alongside Realtors are our Affiliate members, who represent related industries in sympathy with the objectives of the Association. Our Affiliate members include mortgage lenders, home inspectors, title and closing services, pest inspection and control and insurance.