News

09

Home Affordability Increases in Capital Area

    SPRINGFIELD (August 9, 2016)    New listings, days on market and affordability increased while prices, home sales, inventory and pending sales decreased in the Capital Area during July 2016, according to the Capital Area REALTORS® (CAR) Multiple Listing Service.  

    For the month of July 2016, the median home sale price (for all single-family homes and condominiums) was $118,000, a decrease of 6.3 percent from the $125,900 July 2015 price.  The year-to-date median price through July of 2016 was $119,900, unchanged from the prior year.   The median is a typical market price where half the homes sold for more, half sold for less.  
    
    The number of homes sold in the Capital Area in July of 2016 was 394, a decrease of 4.1 percent from the prior July.  The number of home sales year-to-date through July of 2016 was 2,213, reflecting an increase of 1.3 percent over the prior year sales of 2,185.

    There were 293 sale pendings in July 2016, down 20.4 percent from the 368 sale pendings during the same time in 2015.  

    “Although down over last year we experienced a historically strong month for home sales in July.  REALTORS were very busy scheduling showings, negotiating contracts and helping clients navigate the home inspection process” said REALTOR Kristie DeBrun, GREEN, GRI, SFR, SRS, president of the organization.

    The 25 foreclosure sales in July of 2016 reflected 6.3 percent of all sales, up from 4.7 percent in July of 2015.

    The average cumulative days on market for all home sales in July of 2016 increased to 81 days, up from 66 days during July of 2015.  Year-to-date cumulative days on market was at 83, a decline from 89 days during the same period in 2015.

    According to CAR, the supply of homes on the market currently stands at 4.5 months, down from 4.6 months during July of 2015.  The days on market metric measures the number of months it would take to sell the current inventory of available homes at the current pace.  Five to six months’ of inventory is considered a balanced market.   

    Affordability climbed by 11.8 percent in July of 2015 with an index of 275.  This index measures overall housing affordability in the Capital Area.  An index of 275 means the median household income is 275% of what is necessary to qualify for the median-priced home under prevailing interest rates.  A higher number means greater affordability.

    "With increased affordability, a decrease in mortgage rates and people wanting to get settled before the school year begins we anticipate that August will be a strong month," said DeBrun.  

    The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 3.44 percent in July 2016, down slightly from the 4.05 average rate during July of 2015.  
                                    
    The Capital Area REALTORS® is the Voice for Real Estate in the Capital Area representing more than 800 members involved in all aspects of the real estate industry.  The Capital Area’s Resource for Real Estate Information can be found at www.SeeHouses.com.

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