Although low supply and tight credit standards are still hurdles to recovery, prices continue to rise in most local areas. Job growth has strengthened lately, but wage growth has not kept pace with the price gains we have seen.
Buoyed by stable and continuously lower interest rates, affordability is still historically high yet below its all-time peak.
Rising inventory levels will lead to more choices for qualified buyers, but as the summer reaches toward fall, the prospect of more homes coming on the market begins to wane.
Closed Sales rose 6.3 percent, closing with a total of 714 residential units sold. New Listings in the Chattanooga region decreased 8.9 percent to 1,115. Inventory levels shrank 4.5 percent to 5,321 units. Prices forged onward.
The Median Sales Price increased 1.6 percent to $155,000. Days on Market were down 0.8 percent to 118 days. Absorption rates improved as Months Supply of Inventory was down 2.1 percent to 9.2 months.
Vicki Trapp, president of the Greater Chattanooga Association of Realtors said, “The U.S. Department of Commerce reported that GDP grew at a 4.0 percent annual rate in the second quarter and that the first quarter was less bad than previously thought. Consumer spending in the first quarter rose 2.5 percent, which is encouragingly in tandem with savings rates.“
Ms. Trapp concluded, “Increased consumer spending means more demand for goods and labor; increased savings rates means more resources for down payments. With rates still low, rents still rising and private job growth accelerating; it's becoming more and more difficult to side with those who are chronically negative about the housing market.”