Wednesday, May 18, 2022 - by Derek English, president, Greater Chattanooga Realtors
It’s hard to believe that spring is here and summer is just around the corner. While rising temperatures usually signal that a “hot” real estate market is on its way, the housing market hasn’t cooled off for the past couple of years. The April housing market statistics show that homes continue to sell at a very fast pace. However, a few national factors are starting to affect the real estate industry.
According to Freddie Mac, the average 30-year fixed rate mortgage exceeded 5 percent in April, the highest level since 2011. The recent surge in mortgage rates has reduced the pool of eligible buyers and caused mortgage applications to decline. We’re seeing a significant impact on refinancing applications, which are down more than 70 percent compared to last year. As the rising costs of homeownership force many Americans to adjust their budgets, an increasing number of buyers are hoping to help offset the costs by moving from bigger, more expensive cities to smaller areas that offer a more affordable cost of living.
Affordability challenges limit buying activity, and early signs suggest that this competition may somewhat cool the market. Nationally, existing home sales are down 2.7 percent as of last measure, while pending sales dropped 1.2 percent, marking five straight months of under contract declines, according to the National Association of Realtors. Inventory remains low, with only a two-month supply at present, and home prices continue to rise, with the median existing home at $373,500, a 15 percent increase from this time last year. However, homes are still selling quickly, and multiple offers are common in many markets.
Locally, New Listings in the Chattanooga region increased 12.1 percent to 1,401. Pending Sales were down 2.6 percent to 1,143. Inventory levels shrank 3.2 percent to 1,060 units. Prices continued to gain traction. The Median Sales Price increased 20.5 percent to $302,500. Days on Market was down 39.1 percent to 14 days. Absorption rates were even with last year as Months Supply of Inventory remained flat at 1.0 months.
Regardless of the market, consulting the expertise of a realtor remains the best way to stay ahead of a competitive market. Realtors have the tools and knowledge to give their clients every advantage they can have in this fast market. Realtors work tirelessly for their clients and communities to assist in their property buying needs. That’s Who We R.