Home sales prices rose in August. The median home sale prices rose 16.9% over last year and rose .18% over July. At least it was a positive. Average home sale prices rose 22.4% over last year and 5.09% over July.
In 2022 we have noticed that when interest rates rise, home prices haven’t fared as well. August bucked that trend. Rates started out at 4.99% in early August and ended about 5.55% at the end of the month.
Home Sale Prices Rose-Will it Continue?
We will be watching September prices closely as rates have risen dramatically. While we are seeing less offers for homes it does not appear that prices are declining right now. We did see some price declines May through July as the market adjusted.
Supply and demand have held for the past 7 weeks or so. We will be doing a future article on supply and demand in greater detail. Suffice it to say, if supply and demand are holding steady as well has home prices, it will setup an interesting baseline as mortgage rates rise after the September Fed meeting.
Our suspicion is it will be difficult to see rapidly rising prices in an increasing rate environment. Our market has done well to hold onto much of the price gains of the past few years and we will be tested in the next 6 months. We believe the year over year price gains we saw in August of 16.9% and 22.4% are about to change. Last year we saw big price runups from September 2021 to April 2022. We will begin bumping up against those numbers, and by the time we get to April it will be hard to eclipse those numbers at an appreciable rate.
Many parts of the country have seen buyers scrambling to complete purchases and lock in rates before they go up. It is possible we will see continued demand from buyers attempting to beat the rate increases. The Fed’s mission is to slow the economy, and that starts with housing. Housing accounts for about 32% of GDP, so how the housing market goes so goes the overall economy. To quell inflation, they must slow the economy.
Our local real estate market has been resilient in the face of strong headwinds. The question is, will our market stand up to what our Fed must do to lower inflation? That is the $64 million question. While we cannot predict what the economy, or what our local market will do, we will track the statistics and report out to you what the data shows, and the feeling on the streets.
If you are thinking about buying now may be a good time. We know of some zero lender fee loans out there that can save you thousands when financing. We can take that savings and buy the interest rate down which also saves on your mortgage payment.
If you’re considering selling, prices have cooled over the summer but leveled off. Now might be a good time to take your profits and move on to your next venture. If you’d like to speak with Brett or Sande Ellis, call us at 239-310-6500 The Ellis Team has been in business over 35 years, so we know how to structure contracts and financing to benefit our clients. Working with agents with experience can make the difference between getting your transaction closed and missing this opportunity. We’re here to help!