Fewer home sales, falling prices

It’s no secret that home buyer and seller activity slowed down late last year.

For one thing, mortgage rates peaked in the fall, with the average 30-year fixed interest rate surpasses 7%The house is now less worth buying And as the economy slowed, fewer people entered the housing market in the Philadelphia area and nationally.

both Prices and home sales fell In the final months of 2022, according to a report on the fourth-quarter Philadelphia housing market, Drexel economist Kevin Gillen released Thursday.

Looking back over the past few months and looking ahead, here are some takeaways.

Philadelphia Home Sales Dropped Significantly…

… from a record set in 2022. About 4,300 homes were sold last quarter. That’s below the city’s quarterly average of his sales of over 4,500.

That’s a 51% drop from when the city posted about 8,700 sales in the first quarter of 2022. Sales last quarter were even lower than normal for this time of year.

” read more: Data Shows Philadelphia Area Housing Market Is Slowing

In Philadelphia, city-wide average home prices fell…

… two consecutive quarters for the first time since early 2014. In the fourth quarter of 2022, average prices adjusted for seasonal market changes and home quality fell 0.9% from him. The last quarter showed his 1.8% decline.

Price declines in the city were modest compared to the rest of the country.

Philadelphia home prices are higher than last year…

…but the rise has slowed since summer 2021, when prices were 12.1% higher than the previous year. The average rate of increase in home prices in the city has outpaced the metropolitan-wide and national averages.

Philadelphia home prices have increased by an average of 5% each year for the past 40 years. Prices have increased by an average of 8.2% per year over the past eight years. Prices are currently growing at an annualized rate of 1.9%, below the historical average for the first time since 2015.

Home prices in January performed better across the Philadelphia area than in other metropolitan areas. Prices have fallen since last year in 17 of the 50 most populous metropolitan areas, According to Redfin report.

Supply of housing in the Philadelphia market…

…rising from pandemic lows. By the end of 2022, he will have more than 4,100 homes for sale, according to multi-listing service BrightMLS. This is up from the city’s record low of about 2,900 units put up for sale in February.

However, the city typically sells about 6,000 homes on average.

Homeowners who are locked into low mortgage rates are still reluctant to put their homes on the market because they are likely to pay higher interest rates on their next home.

A continued increase in housing supply will push prices down.

The market will likely accelerate…

…in the coming months. Not sure how far it will stretch. The rise is a result of seasonal trends and some more favorable market conditions.

Mortgage rates on a downward trend It has brought back some buyers to the market. The average 30-year fixed rate fell again this week to 6.13%. Freddie Mac, according to government-backed mortgage buyer.

Mortgage Bankers Association chairman and chief executive Bob Broeksmit said demand for mortgages has increased this month.

“Purchase demand remains below last year’s levels, but lower interest rates and improved affordability are favorable developments for the housing market heading into the spring.”