Home sales are slowing in the Philadelphia metro
Home sales in the Philly metro were down 24% year over year, closely tracking the decline nationwide, per RE/MAX’s February report.
Why it matters: In 2022, potential buyers were desperate for more inventory. Now, homes are hitting the market but people can’t afford them.
What’s happening: Rates for a 30-year loan were at 6.09% in early February, but had shot up to 6.65% by the end of the month, per Freddie Mac.
By the numbers: Inventory crept up nearly 15% since last February even as sales plummeted in the region.
- Sales also dipped .7% in February compared to January and inventory also dropped 6%.
- It took an average of 30 days to sell a house in February 2022. Last month, it took 21.
Plus: The median sale price in the Philly region rose more than 5% to $305,000 since last February, per RE/MAX.
Philly had the 9th largest drop in home sales over the past year among the top 50 metro areas RE/MAX analyzed.
- Miami had the largest drop in sales (37%), followed by San Francisco (32%) and De Moines, Iowa (29%).
- Nationally, home sales fell by 24%.
Zoom out: Because there’s less competition right now, buyers don’t have to front as much cash as they did a year ago, Axios’ Emily Peck reports.
Between the lines: Buyers who can afford current mortgage rates have more power.
- They have more options than a year ago, they can take their time searching and they can make offers that aren’t wildly above list price.
Yes, but: These rates make buying unaffordable for many.
What they’re saying: Falling housing sales have historically been a prelude to a drop in prices, said Drexel University economist Kevin Gillen.
- A fall in prices could create a more balanced market between buyers and sellers as the spring housing market gets underway.
- “We’ve seen prices rise faster than income; that’s made a lot of housing more unaffordable,” he said.
What's next: Mortgage rates dropped nearly a quarter point this month, which means buyer activity will likely pick back up.
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