Rising Interest Rates and Inflation Contributing to Lack of Sales, According to
Maryland’s October 2022 Housing Statistics
ANNAPOLIS, MD—November 16, 2022—October home sales dropped 36.5%, to 5,745 units sold versus 9,044 units last year, in the latest Maryland REALTORS® Housing Statistics Report. This also represents a drop of 18.9% when compared to September 2022’s figure of 6,748. The average sales price grew at a slower rate of 3.2% to $445,200 against $431,569, October 2021’s figure. Median sales price grew 2.7% to $380,000.
Against this dynamic of fewer sales and higher prices were rising interest rates, as the 30-year fixed mortgage rate peaked at 7.08% and continued limited inventory. Active Inventory fell 17.4% to 10,349 and the number of new listings fell 27.2% to 7,242.
“Rising interest rates and inflation are certainly impeding sales, but when looking at inflation, which reached 7.7% in October—lower than September’s rate of 8.2%—there are signs that inflation may be easing,” said Yolanda Muckle, 2023 President, Maryland REALTORS®, while attending the National Association of REALTORS® (NAR) Annual Conference in Orlando, Florida. “While we can’t predict what the Federal Reserve will do with interest rates, we hope this will point to some rate relief, as well.”
At NAR’s National Conference, NAR’s Chief Economist, Dr. Lawrence Yun, commented that tight inventory, inflation, and elevated interest rates would help to keep prices stable heading into 2023.
"The gap between the 30-year fixed mortgage rate and the government borrowing rate is much higher today than it has been historically," Yun said. "If we didn't have this large gap, mortgage rates wouldn't be 7%, they would be 5.8%. If inflation eases, we'd see less anxiety within the financial markets and lower interest rates, which would allow owners to refinance."
Although a lower number of homes are going under contract and fewer new resale listings are coming on the market, the sales activity for new resale listings going under contract within a couple of weeks remains resilient. If you are considering selling or Buying and looking for an experienced agent who can react quickly by monitoring market conditions on a daily basis. Feel free to contact me if you have any real estate questions ~ CALL / TEXT 301-748-3696 ~ .