How are higher rates affecting the local housing market? Latest reports show how
As mortgage rates and average prices rose, home sales sagged through the region and the state in September.
"We are seeing a market slow down right now," Heather Weeks, a Realtor with Exit Preferred Realty and 2022 President of Pen-Mar Realtors, wrote in an email. "Some of that is seasonal, as we head into the winter months. However, there are also a lot of potential buyers who can’t afford the cost of higher mortgages."
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Depending upon the specifics of a real estate deal, higher mortgage rates can add hundreds of dollars to a monthly mortgage payment, officials said.
In Maryland, only Allegany County recorded more homes sold in September than the same month a year ago, according to figures recently released by Maryland Realtors and Pen-Mar Realtors. Seventeen of the state's 24 jurisdictions reported higher average prices.
Higher mortgage rates means higher payments
"The local market is beginning to feel the pinch of higher interest rates. The looming threat of more rate hikes is causing anxiety within the housing industry. We’re heading into uncharted territory," Weeks wrote in the email.
"Homes that were affordable this summer are now feeling out of reach for some buyers, due to the higher monthly mortgage expenses. People are definitely feeling (the) impact of higher interest rates."
Gabe Fortmann of Academy Mortgage provided a simple example of what those higher rates mean.
In September 2021, the average selling price for a home in Washington County was $273,214. At the time, mortgages rates were about 3%, resulting in a monthly payment of $1,152, Fortmann wrote in an email.
Now, with a mortgage rate of about 6%, that payment would be $1,638, a difference of $486.
"If the clients did not buy the home in 2021, then they would have to alter their search to homes in the $205,000 price range," Fortmann wrote in an email.
He stressed that real-life deals are more complicated and that many factors, such as a person's credit score, come into play.
What's happening in Washington County?
Washington County homes sold plunged 27.9%, from 222 in September 2021 to 160 last month.
Meanwhile, the average price rose 9.3%, from $273,214 to $298,504. The median price jumped 11%, from $246,500 to $273,500. The median is the middle point, with half of the homes selling for less and half selling for more.
Homes spent an average of 19 days on the market in September, up from 18 in September 2021.
Hagerstown is facing a similar story
In the Hagerstown market, sales fell 38.1%, from 168 in September 2021 to 104 last month.
The average price increased 11%, from $257,909 to $286,169. The median price also jumped 11%, from $240,000 to $266.500.
Homes spent an average of 16 days on the market, down from 20.
Here's a look at the market in Franklin County, Pennsylvania
Franklin County, Pa., saw a 12% drop in sales, from 184 in September 2021 to 162 last month.
The average price rose 10%, from $244,373 to $268,741. The median price jumped 14.9%, from $220,000 to $252,700.
Homes spent an average of 23 days on the market, up from 17 in June 2021.
In the Chambersburg market, sales fell 20%, from 75 to 60. The average price increased 12.8%, from $241,965 to $273,002. The median price rose 10%, from $214,900 to $236,500.
The average days on the market rose from 18 to 21.
'This is a market in transition'
For Maryland as a whole, sales fell 28.6%, to 6,748, and average prices climbed 4.8%, to $449,125, throughout Maryland, according to the Maryland Realtors report. The median price jumped 4.3%, to $386,000
Montgomery County reported the most sales, at 934. Somerset County had the fewest, at 24.
Talbot County recorded the highest average price, at $808,739. Allegany County had the lowest, at $146,229.
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"Even though mortgage interest rates have dropped slightly this past week, the rate itself is significantly higher than it was a year ago, and while prices continue to rise, with each passing month the rate of price increases drops further," Yolanda Muckle, 2023 Maryland Realtors president, said in a news release.
Other signs from the housing report that suggest a cool down include a 26.5% drop in pending sales (houses under contract) and a 22.1% drop in new listings, when compared to last year.
"This is a market in transition," Muckle said. "Inventory that takes longer to move, prices that are rising though not as quickly as before, and mortgage rates — despite this slight dip — that are likely to go higher. If you're looking to buy or sell your home, I’d advise doing so now as mortgage rates are likely to go higher.”
Mike Lewis covers business, the economy and other issues. Follow Mike on Twitter: @MiLewis.
September home sales, prices
The following statistics for selected Maryland jurisdictions list the number of homes sold in September and the average prices, with the percentage change from one year earlier.
Allegany County: 73 (up 23.7%); $146,229 (up 6.1%)
Frederick County: 419 (down 27.4%); $495,256 (up 9.2%)
Garrett County: 56 (down 25.3%); $487,883 (down 26.8%)
Washington County: 160 (down 27.9%); $298,504 (up 9.3%)
Maryland: 6,748 (down 28.6%); $449,125 (up 4.8%)
Source: Maryland Realtors
This article originally appeared on The Herald-Mail: Prices rise, home sales fall in Hagerstown, nearby counties
