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.
As the summer draws to a close, multiple opposing factors and trends are competing to define the direction of the real estate market. After the Federal Reserve lowered its benchmark interest rate on July 31, 30-year mortgage rates continued to decline, approaching all-time lows last seen in 2016. Yet most experts agree these reductions are unlikely to bring sufficient relief, at least in the short term, for first-time home buyers. The lack of affordable inventory and the persistence of historically high housing prices continue to affect the housing market, leading to lower-than-expected existing home sales at the national level.
New Listings decreased 9.8% to 1,014. Pending Sales were up 14.1% to 856. Inventory levels shrank 22.4% to 1,737 units.
Prices continued to gain traction. The Median Sales Price increased 4.8% to $220,000. Days on Market was up 3.2% to 32 days. Sellers were encouraged as Months Supply of Inventory was down 25.0% to 2.4 months.
As many homeowners refinanced their homes to take advantage of declining interest rates, consumer confidence in housing was reported to be at historically high levels. Even so, real estate professionals will need to monitor the market for signs of continued imbalances. Although the inventory of affordable homes at this point remains largely stable, it is stable at historically low levels, which may continue to push prices higher and affect potential buyers across the U.S.
In July, the U.S. economic expansion that began in June 2009 became the longest in the nation's history, marking 121 straight months of gross domestic product growth and surpassing the 120-month expansion from 1991 to 2001. The average rate of growth during this expansion has been a milder 2.3% per year compared to 3.6% during the 1990's. Although the economy should continue to perform well for the rest of 2019, most economists see a mild recession on the horizon.
New Listings decreased 10.3% to 1,074. Pending Sales were up 7.8% to 899. Inventory levels shrank 17.8% to 1,757 units.
Prices continued to gain traction. The Median Sales Price increased 5.7% to $222,000. Days on Market was down 6.9% to 27 days. Sellers were encouraged as Months Supply of Inventory was down 16.7% to 2.5 months.
During the record-setting 121-month economic expansion, the unemployment rate has dropped from 10.0% in 2009 to 3.7%, yet many consumers continue to struggle financially. Low mortgage interest rates have helped offset low housing affordability, but high home prices are outpacing median household income growth. In a move to stoke continued economic prosperity, the Federal Reserve reduced the benchmark interest rate by a quarter point to about 2.25%, marking the first reduction in more than a decade.
As was widely expected, the Federal Reserve did not change the target range for the federal funds rate -- currently set at 2.25 to 2.50% -- during their June meeting. Although the economy is still performing well due to factors such as low unemployment and solid retail sales, uncertainty remains regarding trade tensions, slowed manufacturing and meek business investments.
New Listings decreased 13.2% to 1,068. Pending Sales were up 7.9% to 906. Inventory levels shrank 16.4% to 1,718 units.
Prices continued to gain traction. The Median Sales Price increased 5.6% to $216,500. Days on Market was down 5.9% to 32 days. Sellers were encouraged as Months Supply of Inventory was down 17.2% to 2.4 months.
In terms of relative balance between buyer and seller interests, residential real estate markets across the country are performing well within an economic expansion that will become the longest in U.S. history in July. However, there are signs of a slowing economy. The Federal Reserve considers 2.0% a healthy inflation rate, but the U.S. is expected to remain below that this year. The Fed has received pressure from the White House to cut rates in order to spur further economic activity, and the possibility of a rate reduction in 2019 is definitely in play following a string of increases over the last several years.
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*Courtesy of the Greater Lehigh Valley Association of REALTORS®