Home Buyers Brave the Cold in January
For many buyers, 2022 marks a new opportunity to make their home purchase dreams a reality. Despite the January chill, 21,554 showings took place keeping activity warm, but inventory challenges remain, as evidenced by the months’ supply of inventory which decreased from the 2.7 months reported in December to a January supply of 1.4 months with the number of homes for sale 48.3 percent lower compared to last January.
Inventory of existing homes was at 910,000 at the start of the new year, the lowest level recorded since 1999, according to the National Association of REALTORS®. As a result, competition among buyers remains aggressive nationwide.
Locally, prices have increased compared to last January with the median sales price increasing by 9.2 percent to $250,000. The percent of the original list price received at sale increased to 98.1 percent. List prices are expected to continue to increase in 2022.
Pending sales increased by nearly 2 percent from January 2021 to 939 for the month. Closed sales decreased 10 percent from January 2021 to 891 for the month. Sales dipped from last year with the continued lack of inventory having a negative impact on other sales metrics.
The sudden increase in rates and home prices means buyers are paying significantly more per month compared to this time last year, which may cause sales to slow as more buyers become priced out of the market.
According to Freddie Mac, the normalization of the economy continues as mortgage rates rise as the country shows signs of emerging from the pandemic. Rate increases are projected to continue due to a growing labor market and the rise in inflation.