The Market Cooldown is Coming, if it’s Not Already Here

Data released this week from New Jersey Realtors, the state trade association representing more than 61,000 Realtors, pointed to a slowdown of home sales, likely fueled by high home prices and rising mortgage interest rates.

The single family home median sales price for May was $490,000, which is $55,000 more than it was in May 2021, representing a 12.6% increase. New listings for this category were down 8.8% for the month of May, with just 10,269 new single family homes listed. Closed sales were down a similar 8.7% over last year, with pending sales down 10.4%. The percent of list price received remains well over 100%, up 2.1% in May to 104.9%. There were just 16,300 single family homes for sale in May, a 20.5% decrease over last year.

“The buyer pool is inevitably going to shrink, and first time homebuyers are going to be the most affected, which is concerning.” said 2022 Robert White. “But, a smaller buyer pool could also mean less competition among available inventory. And higher mortgage interest rates will lead to a cooling of the intensity of the market that has become normal over the past two years.”

In May 2020, a single family home spent an average of 61 days on the market. In May 2022, a single family home spent an average of just 28 days on the market. Homes in adult communities spent less than that, bottoming out at an average of 25 days.

Inventory remains historically low, with 23,854 single family homes, townhomes and condos, and adult community properties for sale in May, down 20.1% over May 2021.  The median sales price for a home in an adult community rose 27.5% in May to $325,000. The price for a townhome or condo rose a more modest 9% to $349,000 for the same period.

As expected, mortgage rates have climbed higher, with the average 30-year fixed-rate mortgage at 5.78% as of June 16, a .55 increase in just a week, according to Freddie Mac. The rates for the month of May, however, hovered at or below 3%.

For the full reports visit njrealtor.com/data.

New Jersey Realtors is the voice of real estate for New Jersey. It is a non-profit organization serving the professional needs of more than 60,000 Realtor and Realtor-Associate members engaged in all facets of the real estate business. In addition to serving the professional needs of its members, NJ Realtors is dedicated to enhancing the ability of its members to conduct their business successfully while maintaining the preservation of private property rights. Realtor is a registered collective membership mark, which may be used only by real estate professionals who subscribe to the Realtor organization’s strict Code of Ethics and are members of the national, state and local Realtor organizations. For more information, visit njrealtor.com.

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