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.
The U.S. housing market has continued to cool, as rising mortgage rates and record high sales prices have stifled affordability, weakening demand and pricing out a multitude of buyers. Nationally, median household income has failed to keep pace with increasing mortgage payments, with the costs of buying a home about 80% more expensive now than they were just three summers ago, according to the National Association of REALTORS® (NAR). As more and more prospective buyers find their home purchase plans delayed, many are turning to the rental market, where competition has intensified due to increased demand.
New Listings decreased 19.9% to 876. Pending Sales were down 11.9% to 745. Inventory levels shrank 19.2% to 826 units.
Prices continued to gain traction. The Median Sales Price increased 9.1% to $300,000. Days on Market was down 7.1% to 13 days. Sellers were encouraged as Months Supply of Inventory was down 14.3% to 1.2 months.
At a time of year when homebuying activity is typically very strong, soaring homeownership costs have caused home sales to decline nationwide for the fifth consecutive month, with existing home sales falling 5.4% month-to-month and 14.2% year-over-year as of last measure, according to NAR. But there is a bright spot. Inventory of existing homes has continued to climb this summer, with 1.26 million homes available at the beginning of July, equivalent to a 3 months supply. And, despite the summer slowdown, homes are still selling quickly, with the typical home staying on the market an average of 14 days.
Rising inflation, soaring home prices, and increased mortgage interest rates have combined to cause a slowdown in the U.S. housing market. To help quell inflation, which reached 8.6% as of last measure in May, the Federal Reserve raised interest rates by three quarters of a percentage point in June, the largest interest rate high since 1994. Higher prices, coupled with 30-year fixed mortgage rate approaching 6%, have exacerbated affordability challenges and rapidly cooled demand, with home sales and mortgage applications falling sharply from a year ago.
New Listings decreased 9.4% to 998. Pending Sales were down 6.9% to 829. Inventory levels shrank 14.6% to 770 units.
Prices continued to gain traction. The Median Sales Price increased 14.9% to $316,000. Days on Market was down 20.0% to 12 days. Sellers were encouraged as Months Supply of Inventory was down 8.3% to 1.1 months.
With monthly mortgage payments up more than 50% compared to this time last year, the rising costs of homeownership have sidelined many prospective buyers. Nationally, the median sales price of existing homes recently exceeded $400,000 for the first time ever, a 15% increase from the same period a year ago, according to the National Association of REALTORS®. As existing home sales continue to soften nationwide, housing supply is slowly improving, with inventory up for the second straight month. In time, price growth is expected to moderate as supply grows; for now, however, inventory remains low, and buyers are feeling the squeeze of higher prices all around.
After two years of record-setting activity, there are signs the housing market might be cooling. High homes prices and a surge in mortgage interest rates are slowing buyer activity, with home sales declining for the third consecutive month under the weight of soaring homeownership costs. The National Association of REALTORS® (NAR) reports existing home sales were down 2.4% from the previous month, while pending sales fell 3.9% as of last measure, extending the trend of recent months. Economists predict sales will continue to soften in the near future, which may put downward pressure on home prices.
New Listings decreased 0.9% to 994. Pending Sales were down 2.0% to 854. Inventory levels shrank 17.9% to 660 units.
Prices continued to gain traction. The Median Sales Price increased 16.0% to $290,000. Days on Market was up 6.7% to 16 days. Sellers were encouraged as Months Supply of Inventory was down 10.0% to 0.9 months.
The slowdown in sales has provided a much-needed lift to the housing supply, with inventory up 10.8% from the previous month according to NAR, although supply remains down 10.4% compared to this time last year, with only 2.2 months' supply of homes at the current sales pace. As the nation continues to explore ways to solve the ongoing housing shortage, estimated at 5.5 million homes, the Biden administration recently unveiled the Housing Supply Action Plan, which aims to expand housing access through a number of administrative and legislative actions and help relieve the nation's housing crisis over the next 5 years.
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*Courtesy of the Greater Lehigh Valley Association of REALTORS®