There is good news to be found for both sellers and buyers alike in the current state of the market. In the latest home data, inventory rose slightly, the median sales price rose, and existing home sales fell 2.4% year over year. What does this mean? I’ll explain in today’s Spring 2022 Market Update!
Inventory Update
Further, the latest home report from February tells an interesting story. Total home inventory rose 1.2%, or to about 870,000 properties, compared to February of 2021. This indicates that there were more available homes available to purchase for buyers at the beginning of the year. A lower inventory generally means that it can be more difficult for buyers to locate properties and acquire them. The harder that part gets, the harder all the rest gets, as closing the deal can be much more stressful. Thankfully, there was a tangible increase in what was out there, so buyers had an easier time finding their dream homes. What about pricing?
Median Pricing Continues to Rise
Though inventory rose, median pricing rose along with it, hitting a 15% increase compared to the same period in 2021, up to $357,300. This kind of correlation usually comes from the higher demand, and it shows: actual time on the market for each home has reduced. Higher demand and less available time translates to higher prices, and the extra inventory is simply not enough. One of the predominating factors here is the pandemic. Work stoppages and construction halts have set projects far behind, meaning that inventory levels may not catch up to the needed balance for quite some time. Pricing will be something to watch over the next few months to see if any inventory adjustments have an effect.
Pending Home Sales Fall
Additionally, existing home sales fell about 2.4% year over year and 7.2% down from January, indicating that affordability may be a contributing factor. Two major aspects of this are the rising home prices and interest rates. Some buyers who may have qualified for a mortgage at the lower rates from last year are no longer qualified at the near 4% rates we are seeing now. Monthly payments look to be increasing as well, to about 28% higher than they were a year ago. This all occurs as we continue to see multiple offers on many properties out there.
Conclusion
In summary, there are some interesting numbers to see here. Sellers have enjoyed a competitive advantage over the last several months, but as we can see with the increase in inventory, buyers are slowly starting to get back into the game. The next few months will tell the real story; should inventory continue to improve further, we will see buyers have more choices and a better footing to stand on. For more detail on this data, visit this summary of what the NAR and economists are saying, and be sure to check out our quick ways of improving your home’s value!