Rising mortgage rates and high prices are starting to weigh on potential home buyers across the Mid-Atlantic, with sales down 7.6% year-over-year, according to the Bright MLS Monthly. Housing Report published on Monday. According to the report, as home buyers retreated, active listings rose for the first time since June 2015. Despite a deceleration in sales, the median home price in the area continues to rise rapidly, hitting a record high. of $399,000 in May. — $124,000 more than five years ago, Bright MLS said.
“Rising mortgage rates and rapidly rising prices are beginning to undermine the purchasing power of some potential buyers. The monthly payment for a typical home in the Mid-Atlantic is 44% higher than a year ago,” said Bright MLS chief economist Dr. Lisa Sturtevant. “As inventory has started to increase, there will be more options for buyers. However, this remains a seller’s market with homes at record highs and half of all homes sold in less than 6 days.
Washington DC metro: despite the drop in sales, the market remains competitive
- Compared to the blistering pace of last year, home sales activity in the Washington metro area has slowed, with sales down 11.6% from May 2021. A lack of inventory, as well affordability issues and rising mortgage rates have created headwinds in the market.
- Despite the drop in sales, house prices continue to rise rapidly in the metro. At $605,000, the median price is up 8.0% from a year ago and is now nearly $160,000 higher than it was five years ago.
- Low inventory has been a constraint in the Washington area market. The number of active listings was down from last year, but the decline was less than in recent months.
“The Washington real estate market has remained competitive. However, the deceleration in buyer activity suggests economic headwinds are pulling some potential buyers out of the market,” Sturtevant said. “Inventory is still low, although in some local markets supply has bottomed out. In the coming months, expect activity in the housing market to be slower than last year’s blistering pace. Prices will continue to rise, but price increases will be lower than they have been for the past two years.
Baltimore Metro: Market conditions are starting to cool
- Home sales in the Baltimore metro area fell 6.9% from May 2021, the sixth consecutive month that sales have fallen from the blistering pace of the previous year. New pending sales in the metro area were down 19.2% from a year ago, and new pending sales also fell between April and May.
- While trading activity was weaker, prices continued to rise. The median selling price in May was up 10.0% year over year, and the region’s median price is now more than $101,000 higher than it was five years ago .
- Inventory rose 2.5% between May 2021 and May 2022. This is the first increase in active listings in the Baltimore metro area since June 2019. The increase in inventory is due to a slowdown in the buyer activity, rather than an increase in new listings in the area.
“The Baltimore-area housing market is at a point of transition. After two years of frantic activity, market conditions are beginning to cool. Rising mortgage rates and rising prices have started to cause some potential buyers to hold back. Inventory has started to grow, which means buyers who are in the market will have more options. In the coming months, expect prices in the Baltimore metro area to continue to rise, although the pace of price appreciation will be weaker than it has been,” Sturtevant said. .
Philadelphia Metro: Sales Down, Prices Rise Fast
- In May 2022, the number of home sales in the Philadelphia metropolitan area was 6.3% lower than in May 2021 and the number of new contracts in progress decreased by 11.2%.
- Despite economic headwinds, there is still relatively strong demand in the Philadelphia market. Home prices in the Philadelphia metro area continue to climb, with the median sale price rising 12.7% in May. The median home price in the area is now more than $105,000 higher than it was five years ago.
- There were 15.0% fewer active listings at the end of May compared to a year ago. However, inventories rose 8.0% between April and May, a larger increase than a typical month-to-month change, signaling that supply may have bottomed.
“Expect home sales activity to continue to slow. Inventory will increase somewhat as buyers pull back. The higher priced segment of the Philadelphia market may be more resilient as buyers income will be less sensitive to higher mortgage rates. Overall, home prices in Metro Philadelphia will continue to rise, although the pace of price appreciation will ease in the coming months,” said Sturtevant.
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