Housing Supply Overview
A spike in mortgage rates, increased building costs, and record-setting new home prices continue to take their toll on the construction industry, as new single-family home sales plunged 16.6% month-over-month, according to recent data from the Commerce Department. With the median price of a newly built home a record $450,600 as of last measure, declining affordability continues to hamper demand, as mortgage applications for new home purchases fell 10.6% compared to a year ago, according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS). For the 12-month period spanning June 2021 through May 2022, Pending Sales in the Western Upstate region were down 6.4 percent overall. The price range with the largest gain in sales was the $300,001 and Above range, where they increased 10.2 percent.
The overall Median Sales Price was up 11.5 percent to $250,000. The property type with the largest price gain was the Condos segment, where prices increased 18.8 percent to $189,900. The price range that tended to sell the quickest was the $100,001 to $150,000 range at 41 days; the price range that tended to sell the slowest was the $300,001 and Above range at 49 days.
Market-wide, inventory levels were up 70.6 percent. The property type that gained the most inventory was the Condos segment, where it increased 75.0 percent. That amounts to 2.2 months supply for Single-Family homes and 3.2 months supply for Condos.
After two years of record-setting activity, there are signs the housing market might be cooling. High home 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 were up 30.9 percent to 847. Pending Sales decreased 28.9 percent to 394. Inventory grew 70.6 percent to 1,230 units.
Prices moved higher as Median Sales Price was up 19.1 percent to $280,000. Days on Market decreased 34.5 percent to 36 days. Months Supply of Inventory was up 76.9 percent to 2.3 months, indicating that supply increased relative to demand.
The slowdown in sales has provided a much-needed lift to 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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