The median single-family sale price jumped 10 percent year-over-year in February, to $401,667 according to The Warren Group, publisher of The Registry Review.
A series of interest rate increases by the Federal Reserve last year is making matters worse for homebuyers, pushing mortgage rates to their highest level in two decades.
The average long-term rate on a 30-year mortgage reached a two-decade high of 7.08 percent in the fall. Rates eased in December and January, but have been climbing since early February. The average rate hit 6.73 percent earlier this month, the highest level since early November. A year ago, it averaged 3.85 percent.
That rate translates into a roughly 49 percent increase in the monthly payment on a median-priced U.S. home than a year ago, said George Ratiu, senior economist at Realtor.com.
“For real estate markets, the rise in rates means higher mortgage payments, deepening the affordability challenge just as we move into the crucial spring homebuying season,” he said.
For prospective buyers holding out for a meaningful dip in mortgage rates, they may be in for a long wait. Zillow recently polled 100 economists and real estate experts on their outlook for what the average rate on a 30-year mortgage will be by the end of this year and the median forecast was 6 percent.
Stronger-than-expected reports on the economy this year have fueled expectations that the Federal Reserve may have to keep pushing up its key borrowing rate to tame inflation, deepening the affordability challenge for would-be buyers.
The impact of high rates showed up when Silicon Valley Bank’s collapse sent a shudder through the markets, pushing the average 30-year mortgage rate from 7 percent to about 6.5 percent from March 10 to March 13.
Previously sidelined buyers reacted quickly, combination brokerage and listings portal Redfin said: Bay Equity, the company’s mortgage-lending subsidiary, locked a rate on more loans on March 10 than any other day so far this year. Overall, U.S. purchase mortgage applications increased 7 percent from the week before during the week ending March 10. And touring activity as of March 11 was up about 19 percent across the country from the start of the year, compared with a 22 percent increase at the same time last year, according to data from home tour technology company ShowingTime that Redfin reported.
“Buyers pounced when rates fell because they’re so volatile right now, which shows that there are plenty of people waiting in the wings for the right time to enter the market. Where mortgage rates go from here largely depends on how the Fed reacts to chaos in the banking industry in the U.S. and abroad, alongside stubbornly high inflation,” Redfin Economics Research Lead Chen Zhao said in a statement.
Despite affordability challenges, the median home sale price continued to rise in New Hampshire last month.
According to The Warren Group, publisher of The Registry Review, the median single-family sale price jumped 10 percent year-over-year in February, to $401,667, while the number of single-family home sales that closed last month fell 23 percent to just 434.
The average number of days a home spent on the market last month increased, too, according to the New Hampshire Association of Realtors. That figure sat at 42 days in February, a 13.5 percent rise year-over-year.
Forward-looking indicators NHAR reported recently suggest that the statewide housing market was poised to enter spring with a serious deficit of inventory – something that could help support prices, experts say.
Only 675 single-family properties were listed in February, 20.3 percent fewer than were listed in February 2022. Overall inventory rose 9 percent to 1,187 homes, but pending home sales fell only slightly, by 4.8 percent to 726.
Registry Review staff writer James Sanna contributed to this piece.
