In February throughout the country, buyer demand continued to be down from its peak level. Home prices continued to slow nationwide, although prices remain up from a year ago. Sellers have been increasingly cutting prices and offering sales incentives in an attempt to attract buyers, who have continued to struggle with affordability challenges this winter. The slight decline in mortgage rates earlier this year convinced some buyers to come off the sidelines, but with rates ticking up again in recent weeks, buyers are once again pulling back, causing sales activity to remain down heading into spring.
Also, in its continued effort to curb inflation, the Federal Reserve raised its benchmark interest rate in February by a quarter-percentage point to 4.50 percent - 4.75 percent, its eighth rate hike since March of last year, when the interest rate was nearly zero.
Mortgage interest rates have dipped slightly from their peak last fall, leading pending sales to increase 8.1 percent month-to-month as of last measure, but affordability constraints continue to limit homebuyer activity overall, with existing-home sales declining for the 12th consecutive month, according to the National Association of Realtors.
Here in our neck of the woods, New Listings in the Chattanooga region decreased 12.9 percent to 936. Pending Sales were down 6.3 percent to 918. Closed sales were down 9.6 percent to 787 compared to February 2022 where 871 properties were sold. Inventory levels grew 57.1 percent to 1,529 units. This is a remarkable increase over February 2022, in which only 973 homes were available.
Prices continued to gain traction. The Median Sales Price increased 3.3 percent to $297,500. In February 2022, the Median Sales Price was $288,000. Days on Market was up 85.7 percent to 39 days. For comparison, the Days on Market for February 2022 was only 21 days. Buyers felt empowered as Months Supply of Inventory was up 77.8 percent to 1.6 months.
So inventory is increasing, and prices are stabilizing. These factors are just a few of the reasons why it is absolutely critical to utilize the expertise of a realtor. We are bound by our Code of Ethics to make sure that our clients’ needs are met responsibly. Realtors work tirelessly for their clients and provide expert knowledge. That’s Who We R.