May 3, 2022 - News

Des Moines' housing market signals a cooldown

Data: Des Moines Area Association of Realtors; Chart: Baidi Wang/Axios
Data: Des Moines Area Association of Realtors; Chart: Baidi Wang/Axios

Some early home sale numbers for 2022 are signaling a potential cooldown in Des Moines' hot housing market later this year.

Driving the news: Pending home sales are down 11% for the first quarter of 2022 in comparison to 2021 β€” an early sign that closed home sales will also trend downward, Ted Weaver, president of the Des Moines Area Association of Realtors, told Axios.

  • It's the first year-over-year decline in recent years, Weaver said.

State of play: Since the housing boom started in 2020, 30-year mortgage interest rates in Des Moines have increased from their historic lows of 2.8% in early 2021 to now above 5%.

  • That combined with rising home prices may be lessening the urgency people feel to purchase a house, especially as they're getting priced out from what they could qualify for just a year ago, Weaver said.

The big picture: The Federal Reserve is expected to raise interest rates half a percentage point this week β€” the first move of its kind in 20 years.

  • If rates keep escalating, sales will likely drop β€” potentially leveling the supply vs. demand imbalance.

Yes, but: Don't expect any immediate changes. Des Moines' housing market is still hot as we enter the busiest home-buying season of the year.

  • Weaver recommends homebuyers make a plan and be ready to jump into their dream home.
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