High Mortgage Rates Affecting Home Buyers and Sellers
Recent data from the October 2023 Virginia Home Sales Report shows a significant decrease in home sales compared to last year. With 7,764 homes sold in October, this marks a 12.1% drop in sales, largely attributed to rising mortgage rates and a tight supply in the housing market. This ongoing trend has left both potential home buyers and sellers reluctant to participate in the market.
Increased Mortgage Rates Impact the Housing Market
In October, mortgage rates reached their highest levels since 2000. Although these rates have slightly decreased in recent weeks, the high rates during September and October had a considerable impact on the housing market. The total sold volume in Virginia for October was around $3.7 billion, a 7.6% decrease compared to the same time last year.
Active Listings and Inventory
At the end of October, there were 18,845 active listings on the market across the state. This number is 678 listings fewer than the same time last year, reflecting a 3.5% decrease. Virginia REALTORS® Chief Economist Ryan Price suggests that “while our inventory remains low, the pace of decline has moderated. This could indicate that we are finally nearing the trough.”
Statewide Median Sales Price
Due to the low inventory of available homes, buyer demand continues to put upward pressure on prices. The statewide median sales price increased by $25,000 from last year, reaching $390,000 in October. This 6.8% median price gain is the second strongest price increase this year.
Sellers Receive Slightly Above Asking Prices
Despite the current interest rate environment, sellers who decide to list their homes are still receiving slightly above their asking prices. Virginia REALTORS® 2023 President Katrina M. Smith states, “Houses aren’t staying on the market long in Virginia. The median days on market statewide in October was 11 days, down from 13 a year ago. The market conditions remain competitive for buyers, even as fewer sales are occurring, due to the low inventories.”
Looking Forward
As 2023 comes to a close, the housing market trend of slow and competitive sales is expected to continue into 2024. With transaction volume remaining at a decade low and prices continuing to rise, homes are still selling quickly, leaving buyers and sellers navigating a challenging market. To view the full October 2023 Virginia Home Sales Report, click here.
Orginal article: Link To Article – provided by Kansas City Realtors
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