Here are the trends we’re seeing in our local and national housing markets.
In today’s market update, we’ll be going over the changes we’ve seen recently in both our national and local markets.
Throughout the country, home prices have been accelerating due to the combination of fierce buyer competition and low home inventory. However, sales have declined somewhat over the past few months. Locally, we’ve seen a 2.2% year-to-year increase in sales in Dane County, with a 12.9% increase in median home prices. In other words, median home prices rose from $310,000 to $350,000 in a year.
Experts believe that price growth will slow down by the end of summer as more homes begin hitting the market.
There’s an affordability issue for many first-time homebuyers. Though our current low interest rates help keep things a little more affordable, the cost of buying a home is simply too much for many. Around half of the homes sold are still selling for more than their listing price—locally, they sell for around 102% of the list price. According to the National Association of Realtors, the median sales price for existing homes rose 23.4% from June 2020 to June 2021.
Fortunately, experts believe that price growth will slow down by the end of summer as more homes begin hitting the market. However, a broad decline in prices is highly unlikely. This month, the total market supply has increased, and we’ve also seen a shift in listing activity. For the first time since January 2021, the number of sales is higher than the number of new listings. This may be an anomaly, but some believe it’s due to news of the COVID-19 delta variant.
The national market is currently being driven by three key factors. First, millennials—the country’s largest generation—are enlarging their families and buying homes. Next, mortgage rates have been falling, and low rates drive home buying activity. Finally, the pandemic has caused many to move out of the city and into more suburban environments where they can work from home.
For the fifth consecutive week, 30-year fixed-rate mortgages have been below 3%. Meanwhile, 15-year rates have hit record lows. Home builders are capping sales to manage their costs and ensure they don’t promise more homes than they can actually build.
If you’re thinking about buying or selling a home and would like to learn more about our current market, feel free to reach out to me. I look forward to hearing from you soon.