MARKET UPDATE FOR MAY 2022
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 decreased 10.2 percent for Single Family homes and 19.4 percent for Townhouse-Condo homes. Pending Sales decreased 48.0 percent for Single Family homes and 52.0 percent for Townhouse-Condo homes. Inventory decreased 1.0 percent for Single Family homes and 5.5 percent for Townhouse-Condo homes.
Median Sales Price increased 13.7 percent to $1,055,000 for Single Family homes and 18.6 percent to $670,085 for Townhouse-Condo homes. Days on Market decreased 18.8 percent for Single Family homes and 31.6 percent for Townhouse-Condo homes. Months Supply of Inventory increased 14.3 percent for Single Family homes and 16.7 percent for Townhouse-Condo homes.
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.