The housing market has reached a reckoning point.
The housing sales stats are not national, but are pulled from Bright MLS, which serves large portions of 5 states and DC: Virginia, Maryland, DC, Pennsylvania, Delaware, New Jersey and West Virginia.
The interest rate stats are from FreddieMac’s weekly mortgage survey.
Some of these areas are suburban, some rural and others are major metropolitan areas (DC, Philadelphia and surrounding counties).
• Mortgage Rates
The “bottom” of the rates occurred in January of 2021.
The rates did not immediately go up from there… and you can see they “stayed low” until December of 2021.
Shortly after that, the mortgage rates began to sharply rise, in response to the fed raising rates.
The mortgage rates going higher is well known. And in itself, is no longer newsworthy.
The real concern is how the market has reacted.
|Month/Year||Appx. Mortgage Rate||90 Day Avg # Listings||90 Day Avg Sales Price|
|January 2021||• 2.65 %||• 95,133||• $392,000|
|January 2022||• 3.22 %||• 84,463||•$424,333|
|January 2023||• 6.48%||• 62,230||• $432,667|
The rates are higher, so listings should stay on the market longer. But prices so far are stable overall in the Bright MLS market.
This means buyers will have to pay a lot more for a home because of the sharp rate increases.
And the selection of homes for sale has gone down.
• Number of New Listings
|Month/Year||90 Day Avg # Listings||90 Day Avg New Listings||% of New Listings|
|January 2021||• 95,133||• 23,840||• 25.0%|
|January 2022||• 84,463||• 21,642||• 25.6%|
|January 2023||• 62,230||• 18,499||• 29.7%|
The number of new listings that make up the current 90 day average is up about 4%. If the market slows down more, this number could increase.
However, for the market to be more balanced more homes need to be listed.
• New Construction Housing Stats
Note: these are national statistics, from the census bureau. Stats are seasonally adjusted (see glossary from the bureau.)
New construction housing starts:
- January 2022: 1,666,000
- January 2023: 1,309,000
- Jan. year over year increase/decrease: (-21%)
Permits issued for new construction projects:
- January 2022: 1,841,000
- January 2023: 1,339,000
- Jan. year over year increase/decrease: (-27%)
Completed new construction residential projects:
- January 2022: 1,247,000
- January 2023: 1,406,000
- Jan. year over year increase/decrease: 13%
- Interest rates have gone higher, and are projected to continue to move up and/or stay high for the foreseeable future.
- In the BrightMLS served mid-atlantic area, the 90 day average number of listings has decreased 26% year over year. And that average is down 34% from 2 years ago this time.
- Prices, on average, have not decreased year over year (they are slightly higher). Keep in mind some areas have seen decreases and others increases.
- Prices could go down in the near future, especially if the number of listings increase.
- The 90 day average of new listings hitting the market is lower year over year, but new listings makeup 29.7% of total homes for sale (last year was 25.6%).
- Listings are staying on the market slightly longer on average.
- Nationally, new construction starts and permits issued has decreased year over year. Housing completions are higher year over year. But new construction supply could decrease due to less building. It will depend also on overall market conditions.
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