Summer Home Buying Season Sees Mortgage Rates Impacting Market Activity
Higher mortgage rates, elevated sales prices, and a lack of housing inventory have continued to impact market activity during the summer homebuying season. Though existing home sales have slowed throughout the Capital Region, certain pockets of areas have seen positive activity. The City of Albany’s new listings increased by 14 percent last month. But the continued lack of overall inventory continues to drive home prices up. Saratoga Springs experienced a 76 percent price increase to a median sales price of $720,000. New construction followed with an increase of 12 percent landing at a median price of $556,817.
Pending Sales decreased to 1,143 from year over year August 2022. Greater Capital Association of REALTORS® CEO, Laura Burns, noted, “Though pending sales are down, the decrease is small – only 3.5 percent – which can indicate a slow turnaround in the market as buyers get their arms around the “new normal” in interest rates.”
Newly listed homes were down by 0.4 percent; a significant improvement compared to the levels from the previous year, and from July’s nearly 17 percent decline. This positive shift is attributed, in part, to a decrease in listing activity late last summer through the end of the year. However, there was an 11 percent uptick in newly listed homes between July and August. This late-summer increase in new listings deviates from the typical seasonal pattern. While the increase was small, it offers more choices for buyers grappling with affordability challenges throughout the year.
Inventory levels market-wide decreased 20 percent to 1,866 units which impacted prices to continue to rise. The median sales price increased 6.7 percent to $320,000. Affordability remains a concern, but buyers have been able to meet the challenges of buying in this market.
Months’ supply of inventory was down 4.5 percent compared to last year, at 2.1 months. As with pending sales, months’ supply of inventory is down but less than in previous years – another indicator that the market may be correcting itself. Still, Sellers received, on average, 102 percent of their original list price, up slightly from last year.
As Realtors and their clients prepare for the cooler weather the change of season brings, they look to the Fed to keep rates and inflation at bay so the market can remain seasonably warm.