In its continued effort to curb inflation, the Federal Reserve raised its benchmark interest rate in February by a quarter-percentage point to 4.50% – 4.75%, its eighth-rate hike since March of last year, when the interest rate was nearly zero. Mortgage interest rates have dipped slightly from their peak last fall, leading pending sales to increase 8.1% month-to-month as of the last measure, but affordability constraints continue to limit homebuyer activity overall, with existing-home sales declining for the twelfth consecutive month, according to the National Association of REALTORS® (NAR).
New listings decreased by 4.7% for residential homes and 2.1% for townhouse/condo homes. Pending sales decreased by 13.8% for residential homes and 9.4% for townhouse/condo homes. Inventory increased by 9.2% for residential homes but decreased by 9.1% for townhouse/condo homes.
Median sales price increased 4.7% to $251,300 for residential homes and 7.3% to $203,800 for townhouse/condo homes. Days on market increased by 40% for residential homes and 8.6% for townhouse/condo homes. Months supply of inventory increased by 30% for residential homes and 11.1% for townhouse/condo homes.
With buyer demand down from peak levels, home price growth has continued to slow nationwide, although prices remain up from a year ago. Sellers have been increasingly cutting prices and offering sales incentives in an attempt to attract buyers, who have continued to struggle with affordability challenges this winter. The slight decline in mortgage rates earlier this year convinced some buyers to come off the sidelines, but with rates ticking up again in recent weeks, buyers are once again pulling back, causing sales activity to remain down heading into spring.