Home prices spike again across Lehigh Valley but there’s reason for buyer optimism, experts say
Affordable housing continues to be a roadblock for many homebuyers and it’s even giving sellers preparing to enter the home buying market a cause for concern, area realtors say.
Although buyers have more options to choose from, home prices remain high and soaring borrowing costs have increased monthly payments significantly, with the average homebuyer paying 77% more on their loan per month compared to the same period a year ago, according to Realtor.com.
“Buyers are delaying home purchases in hopes rates will drop, while many sellers are holding off on listing their homes due to weakening buyer demand and to not trade in their current lower rates for significantly higher borrowing costs on their next property,” Greater Lehigh Valley Reator’s Association CEO Justin Porembo said.
According to Bankrate, the average 30-year fixed mortgage APR is 6.61%, up eight basis points, as of Thursday. Nationally, the 30-year fixed mortgage average interest rate dropped to 6.33% after hovering around 7% in the early half of November and the 15-year loan fixed mortgage rose to a 5.67%, Freddie Mac reports.
Experts say these rates are a good sign of recovery and interest rates could stabilize in the new year, if inflation follows a downward trend.
“With a 6% mortgage rate, housing will become more affordable for many buyers. While the typical family cannot currently afford to buy a median-priced home as the qualifying income exceeds earned income, housing will become affordable again for Americans,” economist Nadia Evangelou said.
In this scenario, the typical family would earn about $1,000 more than the income needed to purchase a mid-priced home, Evangelou noted.
As of October 2022, the national index was below 100, which means that the typical family cannot afford to buy the median-priced home priced at about $370,000, according to the National Association of Realtors.
The median income in the Lehigh Valley now makes up 77% of what is necessary to qualify for a median-priced home under existing interest rates, according to data by the Greater Lehigh Valley Realtors Association. There were 728 units in November for Lehigh and Northampton counties and the median sale price for homes rose 15% to $300,000, according to the association.
“Realtors have been encouraging the Biden administration and our local legislators to keep housing supply and affordability at the top of the legislative agenda,” Greater Lehigh Valley Realtors Association President Howard Schaeffer said. He said suggestions to governments include creating housing vouchers and more programs to support first-time homebuyers.
In Carbon County, the median sales price increased to $235,900. New Listings fell to 49. Inventory was 127 units, down three properties, leading to a months supply of 1.9 months. Days on Market increased to 37 days.
At a Glance:
New Listings slipped 27.3% to 498.
Pending Sales were down 24.4% to 520.
Months Supply of Inventory was up 10% to 1.1 months.
Percentage of List Price Received went slightly above and beyond, but it did tumble 0.3% to 100.6%.
Homes sold, on average, in 18 days, the same number of days as the previous November.