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MORTGAGE RATES: “The average rate on the benchmark 30-year home loan rose to 6.81% from 6.71% last week”, mortgage buyer Freddie Mac said Thursday. “A year ago, the rate averaged 5.30%. The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, also rose this week, climbing to 6.24% from 6.06% last week. A year ago, it averaged 4.45%,” Freddie Mac said.
LISTINGS: The latest NWMLS report shows the number of active listings of single family homes and condominiums systemwide is down nearly 21% from June 2022 (10,607 versus 13,405). For single family homes (excluding condos), year-over-year inventory is down about 22.4%, while condo inventory declined 9.2%.
The higher mortgage rates are contributing to the low level of available homes by discouraging homeowners who locked in those lower borrowing costs two years ago from selling; this is also a key reason home sales have been slow this year. (See chart)
Commenting on listing activity, economist Gardner noted the number of homes for sale in the tri-county area (King, Pierce and Snohomish) jumped nearly 16.6% from May. “That said, the number of homes for sale in the Central Puget Sound area in June was down 48% from the same month in 2019 (pre-pandemic). I believe much of the reason for this is that almost 33% of in-state homeowners have mortgage rates at or below 3%, and 87% of owners have rates below 5%. There is little incentive to list your home for sale if you don’t have to,” he remarked.
The following chart shows all new listings on the NWMLS for June 2023 vs June 2022.:
SALES: In June, the median single-family Pierce County home sold for $545,000, down 4% from 2022. (The median sold price for homes in the Gig Harbor area in June was $799,995.) The median Kitsap home sold for $550,000, down 8%. Median means half of homes sold for more and half for less.
Pending sales throughout the Seattle/Pierce metropolitan area for June totaled 7,759 (112 in Gig Harbor area) . That is a decline from both May’s total of 8,120 (down about 4.4%) and from the year ago total of 8,937 (down about 13.2%).
Last month’s 6,842 closed sales marked the largest number of closings since September, but compared to June 2022 the volume was down about 24%.
“In real estate, it is all about the supply and demand principle,” said J. Lennox Scott, executive officer at John L. Scott Real Estate. “In the current housing market environment, in the more affordable and mid-price ranges where 80% of transactions are occurring, we are observing a virtually sold-out market which has been sending prices higher,” Scott stated.
“Sale prices in King and Snohomish counties rose for the fifth consecutive month and are only modestly lower than a year ago,” observed Windermere Chief Economist Matthew Gardner. “It will be interesting to see if this trend can continue given the stubbornly high mortgage rates.”
MARKET ABSORPTION. In this month’s Market Absorption Report (attached) I included a line near the bottom which shows both June’s averages along with those we had in May. As you will see, prices across the board have increased. Let us know if you want to know what your home should sell for.
Kelly and I have had a great year so far, but we’ve sold every one of our listings and are looking for more. If you have friends or neighbors even thinking about a change, please let them know that our team offers staging and professional photography along with an extensive list of contractors to help make every transaction stress free.
