Prospective homebuyers are in a tough spot right now, but it’s to be expected, experts say
Anyone interested in buying a home is up against a scarily low inventory, rising home prices, fluctuating mortgage rates and anything else that comes with rapid inflation, according to a recent report by the Greater Lehigh Valley Realtors.
The data echoes national trends, Greater Lehigh Valley Realtors President Justin Porembo said.
“Housing inventory remains tight here in the Lehigh Valley and nationwide – if you can believe there were only 980,000 units (nationally) available for sale heading into April,” Porembo said. “The lack of existing inventory continues to impact home sales. Competition for available properties remains strong, especially in certain price categories, with multiple offers again dominating the market.”
Approximately 498 units went up for sale in April in Northampton and Lehigh counties. Median sales prices grew 12% to $315,000, according to the report.
Tim Tepes, of Better Homes and Gardens Real Estate, told lehighvalleylive.com one reason for regional low inventory is due to sellers’ hesitation to list properties on the market because they’ve already locked into much lower rates during the pandemic.
Others, Tepes said, are hesitant to buy or sell in a time of economic uncertainty.
Tepes’ market covers Northampton and Lehigh counties, and also reaches into neighboring Berks, Bucks and Carbon counties.
“There’s a little holdback with job security, inflation, and how the economy is handling it,” —but low inventory between May to June isn’t uncommon both regionally and nationally, he said.
“This earlier part of summer is always, believe it or not, a little slow right now because of high school and college graduation.”
The lack of existing inventory continues to impact home sales. With only 2.6 months’ supply of homes at last measure and days on market up 71.4% to 24 days, competition for available properties remains strong, especially in certain price categories, with multiple offers occurring on about a third of properties, according to the National Association of Realtors.
As of Monday, the average 30-year fixed rate mortgage was 6.35%; and 5.75% for a 15-year fixed rate mortgage, Freddie Mac reports. Bankrate calculates the APR for 30-year 6.89%, up six-basis points from last week.
Refinancing rates were also up: 7.03% (up seven basis points) for a 30-year fixed rate mortgage and 6.28% (down one basis point) for a 15-year fixed rate mortgage, Bankrate says.
Data from the Greater Lehigh Valley Realtors Housing Affordability Index shows regional median household incomes now make up 110% of what is necessary to qualify for a median-priced home under existing interest rate conditions. That number was 186% in 2021.
The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.
This could bring some sighs of relief to many buyers, said Nadia Evangelou, a senior economist and director of real estate research at the National Association of Realtors.
“With a 6% mortgage rate, more Americans can afford to purchase the median-priced home by putting down less than 20%,” she said.
At a Glance
- New Listings dropped 36.5% to 584.
- Pending Sales were down 17.7% to 589.
- Months Supply of Inventory slid 20.0% to 0.8 months.
- Percentage of List Price Received tumbled 1.9% (but still went above and beyond), coming in at 101.2%.
- Homes sold, on average, in 24 days, an increase of 71.4% (or 10 days)
In Carbon County, the Median Sales Price increased to $231,000. Closed Sales remained perfectly steady at 59. Pending Sales dropped to 53. New Listings slipped to 70. Inventory saw an increase. With 105 units, the Months Supply of Inventory increased to 1.7 months. Days on Market increased to 42 days vs. 32 days the previous April.
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Glenn Epps can be reached at [email protected] or glenn_epps_on Twitter.
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