Rising Mortgage Rates Have Stifled Affordability with July’s Real Estate Market Stats Fort Myers and Cape Coral, FL – The U.S. housing market has continued to cool, as rising mortgage rates and record-high sales prices have stifled affordability, weakening demand, and pricing out a multitude of buyers. Nationally, median household income has failed to keep pace with increasing mortgage payments, with the costs of buying a home about 80% more expensive now than they were just three summers ago, according to the National Association of REALTORS® (NAR). As more and more prospective buyers find their home purchase plans delayed, many are turning to the rental market, where competition has intensified due to increased demand. New Listings increased by 6.8% for single-family homes but decreased by 13.9% for townhouse/condo homes. Pending sales increased 14.6% for single-family homes but decreased 1.0% for townhouse/condo homes. Inventory increased 5.8% for single-family homes but decreased 5.8% for townhouse/condo homes. Median sales price increased 17.5% to $422,900 for single-family homes and 36.6% to $334,500 for townhouse/condo homes. Days on Market increased 10.5% for single-family homes but decreased 18.2% for townhouse/condo homes. Months’ Supply of Inventory increased by 15.8% for single-family homes and 25.0% for townhouse/condo homes. At a time of year when homebuying activity is typically very strong, soaring homeownership costs have caused home sales to decline nationwide for the fifth consecutive month, with existing-home sales falling 5.4% month-to-month and 14.2% year-over-year as of the last measure, according to NAR. But there is a bright spot. Inventory of existing homes has continued to climb this summer, with 1.26 million homes available at the beginning of July, equivalent to a three months supply. And, despite the summer slowdown, homes are still selling quickly, with the typical home staying on market for an average of 14 days.
Home Supply is Up While Prices Start to Return to Earth
- Mortgage rates remain around 5%, stretching affordability for many buyers. The typical buyer’s monthly mortgage payment is up 37% from last year to nearly $2,300.
- Homes are beginning to pile up on the market. The number of homes for sale increased 4% in July, the largest increase since before the pandemic.
- As a result, prices are beginning to come down from their all-time highs. The national median home sale price was up 8% in July, the slowest growth rate since July 2020.
- Sellers are pulling back from the market, with new listings down 11% from last year.
What Buyers Need to Know
- The market is more favorable to buyers than it has been in more than two years. While some homes will still get multiple offers, the competition rate has decreased considerably. That means we can take a little more time touring and considering homes before we write your offer.
- When you do find the right home, I’ll help you craft a strong offer with the best terms. I’m seeing more offers accepted that include financing and inspection contingencies, and some sellers are even willing to negotiate on price.
- Mortgage rates will likely stay around 5% this year, but there are different ways to get a more favorable rate. If you’re interested in exploring different financing options, I can connect you with a Bay Equity mortgage advisor.
