Greater Lehigh Valley Real Estate Market Update*

As the main source of real estate information in the Lehigh Valley, the Greater Lehigh Valley Association of REALTORS® is pleased to provide in-depth data on our local housing market. Information is gathered from our Multiple Listing Service (MLS) generating data from over 2,000 Realtor® members.

December 2019:

In 2019 homes prices were up again in most markets.  Buyer demand continues to be strong but with tepid Seller activity in many locations, total sales are lower than they would normally be in a more balanced market.  While up from their recent lows a few months ago, mortgage rates end the year close to three-quarters of a percent lower than a year ago, helping to improve affordability and offset rising home prices.

New Listings decreased 7.3% to 422.  Pending Sales were down 4.3% to 449.  Inventory levels shrank 25.4% to 1,284 units.

Prices continued to gain traction.  The Median Sales Price increased 5.3% to $200,000.  Days on Market remained flat at 42 days.  Sellers were encouraged as Months Supply of Inventory was down 25.0% to 1.8 months.

With low mortgage rates, low unemployment, and continued wage growth, home buyer activity is expected to remain healthy into the new year.  New construction has been on the rise in 2019 and is expected to continue into 2020, but many experts note that the country is still not building enough new units to quench demand.  It remains to be seen whether existing homeowners will be enticed to sell by higher home prices, which could finally bring the overall housing market into greater balance.

November 2019:

In November 2019, the Federal Reserve reduced its benchmark rate for the third time this year.  This action was widely anticipated by the market.  Mortgage rates have remained steady this month and are still down more than 1% from last year at this time.  Residential new construction activity continues to rise nationally.  The U.S. Commerce Department reports that new housing permits rose 5% in October to a new 12-year high of 1.46 million units.

New Listings decreased 9.6% to 614.  Pending Sales were up 18.0% to 656.  Inventory levels shrank 29.2% to 1,488 units.

Prices continued to gain traction.  The Median Sales Price increased 5.1% to $205,000.  Days on Market was down 10.5 % to 34 days.  Sellers were encouraged as Months Supply of Inventory was down 33.3% to 2.0 months.

While many economic signs are quite strong, total household debt has been rising for twenty-one consecutive quarters and is now $1.3 trillion higher than the previous peak of $12.68 trillion in 2008.  While delinquency rates remain low across most debt types (including mortgages), higher consumer debt loads can limit future household spending capability and increase risk if the economy slows down.

October 2019:

In October, mortgage rates increased slightly from the three-year lows seen in September.  While the Federal Reserve reduced the federal-funds target rate by 0.25%, this decline was widely expected and largely factored into mortgage rates already, which are still approximately 1% lower than this time last year.  Fannie Mae is predicting that continued low rates, and possibly lower rates, are expected in 2020.

New Listings decreased 8.2% to 924.  Pending Sales were up 8.6% to 767.  Inventory levels shrank 26.1% to 1,695 units.

Prices continued to gain traction.  The Median Sales Price increased 6.7% to $212,000.  Days on Market was down 10.5% to 34 days.  Sellers were encouraged as Months Supply of Inventory was down 30.3% to 2.3 months.

As we begin the slower time of year for home sales, historically low mortgage rates will continue to support Buyer demand and may create additional lift to homes prices as excellent affordability gives Buyers the ability to offer more to secure their dream home.  Throughout much of the country, the continued low level of housing inventory also continues to constrain sales activity from where it would likely be in a balanced market.

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*Courtesy of the Greater Lehigh Valley Association of REALTORS®