- Pending sales drop nearly 22% from a year-ago
- Closings were down about 24% from a year ago
- Economist Gardner expects prices will soften.
- trend toward a more balanced market.
- Mortgage rates are at their highest level since the Great Recession, according to data released by Freddie Mac Thursday, as housing affordability continues to slump.
- The 30-year fixed mortgage rate is now 5.89%, according to Freddie Mac, up from 5.66% last week and 2.88% at this time last year.
- Mortgage rates are now at their highest since November 2008, when Freddie Mac reported a 6.04% 30-year rate.
- Mortgage rates have climbed as the Federal Reserve raises interest rates to tame inflation.
The 3.01% rise in mortgage rates over the last year is the largest 52-week increase in rates in over 40 years, according to Charlie Bilello of Compound Capital Advisors.
In a report summarizing August activity, Northwest MLS figures showed a continued buildup of inventory – nearly double the selection of a year ago and more than three times the offerings at the end of the first quarter.
Brokers added 9,914 new listings to inventory during August, a drop from both July’s total of 11,805 and the year-ago total (11,437). At month end there were 14,683 active listings of single-family homes and condominiums across the 26 counties in the NWMLS report.
Fewer sales were reported than a year ago, but both pending sales (mutually accepted offers) and closed sales improved on July’s figures.
Northwest MLS members reported 9,552 pending sales, a drop of nearly 22% from the year-ago total of 12,238 pending. Every county except Columbia experienced a decline in pending sales. Activity picked up from July when there were 8,775 pending sales, a gain of nearly 8.9%.
Similarly, the volume of closed sales fell from a year ago. MLS members recorded 7,998 completed transactions, improving 4.6% from July’s total of 7,645. But last month’s closings were down about 24% from the same month a year ago when members notched 10,571 closed sales.
“Last month’s housing numbers certainly are eye-opening,” stated Windermere Chief Economist Matthew Gardner. “However,” he continued, “I believe they are simply indicating the market is trending back to the more normalized conditions that we were seeing before the pandemic.”
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, commented on the local housing market’s resilience. “The resilience is clear as a steady cadence of homes going under contract continues. In the more affordable and mid-price ranges, demand remains strong as buyers look to get settled before fall.”
Broker Dean Rebhuhn, owner at Village Homes and Properties, commented on inflation and pent-up buyer demand. “Buyers are realizing homeownership is a good hedge against inflation,” he remarked. “The market took a slight pause as mortgage rates increased from historic lows. Then, as sellers came to the market with realistic pricing, and price reductions on existing inventory occurred, pent up buyer demand took effect and buyers found homes they could afford.”
Rebhuhn also noted last month’s sales showed home values continue to appreciate.
The median price on sales of single-family homes and condos that closed during August was $600,000, up more than 3.6% from a year ago, but down slightly from July when the area-wide price was $625,000.