Rising inflation, soaring home prices and swelling mortgage interest rates have combined to cause a slowdown in the U.S. housing market.
To help quell inflation, which reached 8.6% in May, the Federal Reserve raised interest rates by three-quarters of a percentage point in June – the largest hike since 1994.
Higher prices and 30-year fixed mortgage rates approaching 6% have exacerbated affordability challenges and rapidly cooled demand, with home sales and mortgage applications falling sharply from a year ago.
Across the nation, monthly mortgage payments are up more than 50% compared to last year. The increase in rising costs of homeownership means there are many sidelined prospective buyers.
Nationally, the median sales price of existing homes recently exceeded $400,000 for the first time – a 15% increase from a year ago, the National Association of Realtors reports.
However, as existing home sales continue to soften nationwide, the housing supply is slowly improving, with inventory up for the second month. In time, price growth is expected to moderate as supply grows. For now, however, inventory remains low and buyers are feeling the squeeze of higher prices.
Locally, there are many hopeful signs of a stabilizing housing market. One very promising indicator is the sharp increase in housing inventory.
Inventory levels grew 31.9% to 1,638 units. As we know, more houses will help lead to more affordable prices.
New listings in the Chattanooga region increased 22.4% to 1,633. Pending sales decreased 5.1% to 1,089.
Prices continued to gain traction in our area. The median sales price increased 19.5% to $328,725. For reference, the median sales price in June 2021 was $275,000.
Days on market was down 23.5% to 13 days. Buyers felt empowered as months supply of inventory was up 25% to 1.5 months.
One thing is certain: Nothing stays the same. This is especially true in the real estate market. We currently find ourselves in a time of change, so if you’re looking to enter the housing market – whether it’s to buy or sell – utilizing the expertise of a Realtor is critical.
Realtors have the tools and the data to help make the most out of your most valuable investment. That’s Who We R.
Founded in 1912, Greater Chattanooga Realtors is a regional organization with more than 2,500 members servicing 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 and boards of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors owns and operates a multiple listing service that’s one of approximately 600 MLSs in the country and services more than 2,700 users.