The latest Northwest MLS stats show 6,435 pending sales last month, and about the same volume (6,464) of closed sales. Both figures were down from the year-ago totals, with pending sales dropping about 39% and closings declining around 35%.
Median sales prices still rose year-over-year in most of the 26 counties on the report. Area-wide, the median price on last month’s completed sales of single family homes and condominiums was $595,000. That was an increase of about 3.5% from twelve months ago, but a decline of approximately 9% from May when prices peaked at $660,000.
Last month’s closings in King County had a median price of $811,000, up more than 8% from the year-ago figure of $750,000.
Brokers added 7,260 new listings during October, down about 21% from the same month a year ago. At month end, the selection included 14,214 active listings of single family homes and condos system-wide. That was more than double the year-ago inventory of 6,588.
The uptick in supply boosted the months of inventory figure to 2.2. That is the highest level, based on this metric, since January 2019.
“Even with more choice on the market than we’ve seen in several years, pending sales fell last month,” remarked Matthew Gardner, chief economist at Windermere Real Estate. “The cause is almost certainly rising mortgage rates, which rose from 6.65% early in the month and ended above 7.1%; this is clearly having an impact on buyers,” he added.
Gardner believes many buyers may remain sidelined until mortgage rates stabilize, but added he had “bad news for those buyers who are sitting on the fence waiting for home prices to implode.” He expects regional home values will turn modestly negative in 2023, but said, “those who hope to pick up a home ‘on the cheap’ are likely in for a long wait.”
Also commenting on interest rates was the National Association of REALTORS®, which noted the slight dip in mortgage rates this week despite the Federal Reserve approving another 0.75% rate hike for the fourth time this year.
NAR cited Freddie Mac’s 30-year fixed mortgage rate that fell to 6.95%, down from 7.08% the previous week. “It seems that rates have already priced in some of the effect of the Fed’s higher interest rates. It is also promising that this was likely the last rate hike of this magnitude, as indicated by the Fed,” wrote Nadia Evangelou, NAR’s senior economist and director of forecasting.
Evangelou also speculated “a return to the sky-high interest rates of the 1980s isn’t likely in today’s economy” and drew comparisons to payments now with those of 40 years ago in today’s money. “In real terms, after adjusting the median home price for inflation, the monthly mortgage payment was about $450 higher in 1982 than it is now,” she wrote in a blog, adding, “If mortgage rates were currently 9% the monthly mortgage payment would be comparable to 1982 rates. Thus, in real values, current buyers pay less for their home purchase than buyers who purchased their home 40 years ago, although home prices are significantly higher now.”
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Source: NWMLS 11/7/2022