In November, the Federal Reserve reduced its benchmark rate for the third time this year. This action was widely anticipated by the market.
Mortgage rates have remained steady this month but still are down more than 1% from last year at this time. Residential new construction activity continues to rise nationally. The U.S. Commerce Department reports that new housing permits rose 5% in October to a new 12-year high of 1.46 million units.
While many economic signs are quite strong, total household debt has been rising for 21 consecutive quarters and is now $1.3 trillion higher than the previous peak of $12.68 trillion in 2008. While delinquency rates remain low across most debt types (including mortgages), higher consumer debt loads can limit future household spending capability and increase risk if the economy slows down.
Locally, new listings in our area increased 8.7% to 926, compared to November 2018. Year-to-date, that’s a 5.7% increase compared to 13,341.
Pending sales were up 30.2% to 846 for November, with a year-to-date increase of 9.7% with 10,283 pending sales.
Inventory levels shrank 15.5% to 2,656 units. Inventory concerns are looking to persist into 2020, which is a sentiment echoed by NAR’s chief economist, Lawrence Yun. “Real estate is on firm ground with little chance of price declines,” he says. “However, in order for the market to become healthier, more supply is needed to ensure home prices as well as rents do not consistently outgrow income gains.”
Prices continued to gain traction. The median sales price increased 13.2% to $215,000, days on market was up 2.0% to 50 days and sellers were encouraged, as months supply of inventory was down 23.7% to 2.9 months.
Markets might change, but Realtors’ commitment to serving our clients doesn’t. Navigating a market that can shift quickly is just one reason why consulting a Realtor is important. We keep a watchful eye on trends locally and nationally that might affect our clients and community. That’s Who We R.
Greater Chattanooga Realtors is The Voice of Real Estate in Greater Chattanooga. A regional organization with more than 2,000 members, Greater Chattanooga Realtors is one of some 1,300 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors service Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in northwest Georgia. For more information, visit www.gcar.net or call 423 698-8001.