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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.

May 2022:

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.

April 2022:

The average 30-year fixed rate mortgage exceeded 5% in April, the highest level since 2011, according to Freddie Mac.  The recent surge in mortgage rates has reduced the pool of eligible buyers and has caused mortgage applications to decline, with a significant impact on refinance applications, which are down more than 70% compared to this time last year.  As the rising costs of homeownership force many Americans to adjust their budgets, an increasing number of buyers are hoping to help offset the costs by moving from bigger, more expensive cities to smaller areas that offer a more affordable cost of living.

New Listings decreased 9.2% to 914.  Pending Sales were down 2.8% to 760.  Inventory levels shrank 27.1% to 570 units.

Prices continued to gain traction.  The Median Sales Price increased 13.7% to $280,000.  Days on Market was down 26.3% to 14 days.  Sellers were encouraged as Months Supply of Inventory was down 20.0% to 0.8 months.

Affordability challenges are limiting buying activity, and early signs suggest competition for homes may be cooling somewhat.  Nationally, existing home sales are down 2.7% as of last measure, while pending sales dropped 1.2%, marking 5 straight months of under contract declines, according to the National Association of REALTORS®.  Inventory remains low, with only 2 months supply at present, and home prices continue to rise, with the median existing home at $373,500, a 15% increase from this time last year.  Homes are still selling quickly and multiple offers are common in many markets.

March 2022:

Nationally, existing home sales recently dropped to a 6-month low, falling 7.2% as buyers struggled to find a home amid rising prices and historic low inventory.  Pending sales are also down, declining 4.1% as of last measure, according to the National Association of REALTORS®.  Builders are working hard to ramp up production - the U.S. Census Bureau reports housing starts are up 22.3% compared to a year ago - but higher construction costs and increasing sales prices continue to hamper new home sales, despite high demand for additional supply.

New Listings decreased 1.2% to 849.  Pending Sales were down 3.0% to 715.  Inventory levels shrank 27.8% to 486 units.

Prices continued to gain traction.  The Median Sales Price increased 16.7% to $280,000.  Days on Market was down 26.1% to 17 days.  Sellers were encouraged as Months Supply of Inventory was down 30.0% to 0.7 months.

Across the country, consumers are feeling the bite of inflation and surging mortgage interest rates, which recently hit 4.6% in March, according to Freddie Mac, rising 1.4% since January and the highest rate in more than 3 years.  Monthly payments have increased significantly compared to this time last year, and as housing affordability declines, an increasing number of would-be homebuyers are turning to the rental market, only to face similar challenges as rental prices skyrocket and vacancy rates remain at a near-record low.

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*Courtesy of the Greater Lehigh Valley Association of REALTORS®