Home Prices Trend Down – At Last
After years of relentless increases, the median price of homes inched downward in February, thanks to the combined efforts of the Federal Reserve and cautious home buyers. This is the first drop in year-to-year home prices since February, 2012, when the market finally began shaking off the effects of the 2008 home market meltdown.
While mortgage rates have dipped slightly from last fall’s high, the Fed’s decision last month to raise the benchmark interest rate by a quarter of a percentage point – its 8th rate increase since last March – has slowed down the overall economy and given potential buyers reason to hold off on big financial commitments. Analysts predict the cooling off of home prices will eventually restore balance to what has long been a seller’s market. The latest market news release from the National Association of Realtors notes that the drop-off in home prices should, in the long run, boost sales activity in the areas of the country “where home prices are decreasing and the local economies are adding jobs.”
That prediction bodes well for the Charlotte area, thanks to the continued influx of businesses, manufacturers, and upscale, mobile newcomers seeking economic opportunity and a higher quality of life.
Here are the February home sales numbers. As of February 28, the median home price nudged downward to $353,550, a drop of 1.9%, or $6,700, compared to the median price of $360,250 in February, 2022. The pace of home sales has dropped dramatically. The number of days on the market until sale grew from 24 this time last year to 48, a 100% increase. The clincher that confirms we’re in a new era is the number of homes for sale. Inventory expanded by 1,950 units to a new total of 4,717, a whopping 70.5% increase from last February’s total of 2,767 homes.