Across the country, consumers are feeling the bite of inflation and surging mortgage interest rates. Freddie Mac reports rates hit 4.6% in March, rising 1.4% since January to the highest level in more than three years.
In April, we’re seeing a continued upward trend in rates. These increases are naturally causing monthly payments to rise significantly compared to this time last year.
As housing affordability declines, an increasing number of would-be homebuyers are turning to the rental market only to face similar challenges as rental prices skyrocket and vacancy rates trend downward to near-record lows.
Home sales have been brisk in 2022, but the early pace seems to be slowing on the national level.
We have seen home sales dip by 7.2% to a six-month low. Buyers are struggling to find homes amid rising prices and historic low inventory.
Pending sales are also down, declining 4.1%, the National Association of Realtors reports.
Builders are working hard to ramp up production, and U.S. Census Bureau reports housing starts have increased 22.3% compared to a year ago.
However, higher construction costs lend to increased sales prices, which in turn hampers new home sales, despite high demand for additional supply.
For the first time in the Greater Chattanooga area, the median sales price of a home surpassed $300,000, reflecting these increased costs and lower inventory. This median sales price is an 18.5% increase in just one year, with the March 2021 median sales price being just over $253,000.
However, there are some hopeful signs for inventory concerns. Spring is in the air, and as I mentioned in early March, new properties will be making their way onto the market during the next few months.
While the economy and real estate news nationally is alarming, new listings in the Chattanooga region increased 6.7% to 1,310 in March. Pending sales increased 6.0% to 1,174.
Inventory levels shrank 28.8% to 810 units from last year at this time but increased from February numbers. In March 2021, there were 1,138 properties for sale.
Prices continued to gain traction. Days on market is down 42.4% to 19 days from March 2021 and is holding steady with similar numbers as earlier in the year.
Months supply of inventory is also maintaining levels of 0.7 months of active inventory in our Chattanooga market.
The data shows this remains a seller’s market. And Realtors are working tirelessly to help their clients get the house they desire, even in this competitive market.
No matter what your needs are, it’s crucial to consult a Realtor. A Realtor will work with you to ensure your housing needs are met. 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 board of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors owns and operates a multiple listing service that is one of approximately 600 MLSs in the country and services more than 2,700 users.