Sunday, July 21, 2024

Home Prices Continue to Rise as Inventory Remains Low

Home prices in Hampton Roads continue to rise while inventory remains low (Pexels/Thirdman)

HAMPTON ROADS — Home prices in the region continue to rise as inventory remains low for perspective homebuyers.

According to the Real Estate Information Network Inc. (REIN), the median sales price for homes in the Hampton Roads area in March 2022 was $300,000. REIN notes that this matches the region’s highest median price, which was set in July 2021.

One of the challenges that the real estate industry is facing is a lack of inventory. REIN reports that the number of active listings is down 21.34 percent with a 9 percent rise in median sales price compared to March 2021.

“I don’t think anyone will be surprised that home prices have risen again,” said Liz Moore, President of REIN’s Board of Directors and Owner/Broker of Liz Moore & Associates. “Inventory is well below where it was last year, while demand remains strong. I think there are buyers who are desperate to get a home before mortgage rates climb any higher than they already have.”

With this, mortgage rates continue to rise. According to Freddie Mac, a company that was chartered by the U.S. Congress in 1970 to help supply reliable and affordable mortgage funds throughout the United States, the average 30-year fixed-rate mortgage (FRM) nationwide for the week ending on April 7, 2022 was 4.72 percent. This is compared to the same time frame in 2021, when the 30-year FRM was 3.13 percent.

“I expect residential inventory to remain low for the foreseeable future,” Moore said. “What’s unknown is how quickly and by how much interest rates will rise. Rising interest rates could price some would-be buyers out of the market.”

Due to the increase in demand, during March 2022, a home remained on the market an average of just seven days, with a total active listings throughout that month of 2,794. REIN notes that the residential inventory decreased by 21 percent compared to 2021 and 59 percent in March 2020. Despite the decrease over the previous two years, the Hampton Roads real estate market saw an increase of .88 percent over February 2022.

Additional notes of interested released by REIN include a 12.4 percent decrease in the number of new construction sales reported through the multiple listing service (MLS), and that, while there was a .3 percent decrease from February to March 2022 in month-over-month pending residential sales, there was still a 1.21 percent increase over March 2021 and a 2.7 percent increase over March 2020.

For more information, please visit the website for REIN.

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