Economic uncertainty is likely a major component of many sellers’ decisions to hold off on listing their homes right now.
Growth of the median single-family home price keeps slowing across New Hampshire according to new data reported by The Warren Group, publisher of The Registry Review.
The August median single-family sale price only grew 6.25 percent on a year-over-year basis, to $425,000. That’s compared to 10.77 percent year-over-year growth in July, 12.95 percent growth in June and 16.02 percent growth in May.
The decline mirrors the increase in mortgage rates seen as inflation worsened and the Federal Reserve raised interest rates in response, sending the average 30-year mortgage interest rate soaring to 6.02 percent by mid-September, according to Freddie Mac.
Monthly numbers of single-family sales are also down, partly thanks to steadily falling numbers of listings this spring and summer, when many of the homes that closed in August went under agreement.
An even 1,400 single-family homes sold in August, according to The Warren Group, an 11.95 percent drop over August 2021’s tally. July sales were off 9.43 percent year-on-year, while June’s were down 9.05 percent and May’s were down 5.72 percent on the same basis.
Year-to-date, there have been 7,960 single-family sales statewide at a median price of $417,000. Those figures represent a 10.03 percent drop and a 12.7 percent increase, respectively, over the same figures at the end of August 2021.
Total inventory was down sharply in August, the New Hampshire Association of Realtors reported, after rising or holding relatively even with 2021’s figures for three months. Only 2,154 homes were for sale last month, compared to 2,402 in August 2021 – a 10.3 percent decline.
New single-family listings continued their multi-month slide, with 16.3 percent fewer homes hitting the market last month than in August 2021, for a total of 1,690. That follows 12.5 percent and 6.3 percent declines in July and June, NHAR data shows.
Economy Weighs on Sellers
While sellers’ motivations for listing – or not listing – are particularly varied right now, the uncertain economy is playing a significant role, experts said. The long run of record-low mortgage rates that powered the frenetic pandemic homebuying and mortgage refinance markets could be playing a part, as well.
John Burns Real Estate Consulting estimates that 73 percent of homeowners nationwide have a mortgage rate below 4 percent. Combined with clear market signals most homeowners can see in the world around them – an increased number of “for sale” signs in their neighborhood, news stories about a cooling housing market – it could be inducing some sellers to stay put if they don’t have to move right away, said Jody Kahn, senior vice president for research at John Burns Real Estate Consulting.
“I think the consumer can detect we’re past the peak pricing in the market,” she said, adding that many also are suffering from less fear of missing out on a historic opportunity.
Ladle in the economic uncertainty of the moment, and sellers have a wide range of reasons to stay put if they’re not in the throes of a major life event.
“Are you going to gamble on a new home, with a potentially higher monthly payments when it seems like we’re on the verge of a recession” if you aren’t being forced to move soon, Kahn asked.
Despite the shrinking number of listings, competition remains relatively strong by several measures.
Single-family homes sold in August received 101.7 percent of their list price, NHAR reported, a decline compared to 102.7 percent in August 2021 but still reflective of bidding wars and offers over asking.
The average number of days a single-family home spent on the market ticked up only slightly in August, NHAR said, from 18 to 19 year-over-year – still less than half the pre-pandemic norm.
And months’ supply stayed constant at 1.6, far below the 6 months traditionally seen as necessary for a balanced market.
Redfin Deputy Chief Economist Taylor Marr said the national housing market is likely to continue cooling, but not crash, thanks to the steady constriction in supply and the lack of significant new construction.
“Our outlook is that price growth is going to continue to slow. We’re not seeing signs otherwise,” he said.
