Mortgage rates at 15-year high are cooling Lehigh Valley market, realtors say

Rising mortgage rates — the highest in 15 years — are squeezing homebuyer budgets and slowing activity in the Lehigh Valley real estate market, area agents say.

Mortgage interest rates in September topped 6% for the first time since 2008, driving existing home sales down nationally for the seventh consecutive month, according to data from Greater Lehigh Valley Realtors. The Federal Reserve announced earlier this year that it would make sporadic changes to mortgage rates to curb rising inflation. The reserve raised another 75 basis points in September, marking the third such rate hike this year.

The average 30-year fixed mortgage interest rate was even higher on October 13, at almost 7%, and a 15-year loan carried an interest rate of 6.09%, reports Freddie Mac.

Justin Porembo, CEO of Greater Lehigh Valley Realtors, said realtors are seeing the cost of borrowing hit multi-year highs on everything from credit cards to auto loans to rising mortgage rates. The median home price in September rose to $384,800 nationally, up 8.4% from a year ago. He scored 127 consecutive months of year-over-year increases, which was the longest streak on record, according to the National Association of Realtors (NAR).

September was also the third month in a row that the median sale price faded nationwide after hitting a record high of $413,800 in June, as the usual seasonal price pattern faded from an early peak. of the summer, NAR said.

The Lehigh Valley is seeing the same activity, Porembo noted, coupled with the usual seasonal slowdown in the real estate market. In Northampton and Lehigh counties, the median sale price rose 13.4% to $298,250 in September from a year earlier. In June, the median sale price in the Lehigh Valley rose about 15% to $316,000, breaking records set in May.

“Inventory remains below normal, and as the market continues to move, experts expect homes to start spending more days on the market and price growth to slow in the coming months,” he said. said Porembo.

Nationally, inventory of unsold existing homes fell for the second straight month to about 1.3 million at the end of September, the equivalent of 3.2 months of supply at the current rate of monthly sales. Regionally, inventory levels fell about 16% to 790 units in September.

Howard Schaeffer, president of Greater Lehigh Valley Realtors, said there’s no denying the real estate market is changing. Sales completed in September also fell about 16% to 722 listings.

“Potential buyers are facing higher-than-expected home prices and interest rates, and sellers are struggling to find new properties to move into before closing their current residences,” he said. . “It got a lot of people wondering if they should just wait or risk a loss by engaging in a volatile market.”

There is good news, however, at least for sellers.

National Association of Realtors Chief Economist Lawrence Yun said despite the drop in sales, several offers are still up with more than a quarter of homes selling above list price due to from a limited inventory. Nationally, properties in September generally remained on the market for 19 days, compared to 16 days in August and 17 days in September 2021. About 70% of homes sold last September had been on the market for less than a year. month.

In September, homes in the Lehigh Valley sold in an average of 17 days, just one day more than the previous year, the local group of real estate agents said.

“The current lack of supply underscores the vast contrast to the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today,” Yun said.

Here are some other notable housing statistics for Lehigh and Northampton counties for September vs. September 2021, according to Greater Lehigh Valley Realtors:

  • New registrations fell 21% to 696.
  • Pending sales fell about 21% to 611.
  • The monthly inventory supply fell about 8% to 1.2 months. This figure measures the number of months it would take to sell the current number of homes on the market.
  • The percentage of list price received went beyond that, but dropped 0.3% to 101.3%.

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Pamela Sroka-Holzmann can be contacted at [email protected].

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