Rush to lock in low rates pushes inventory lower
Pending sales outnumbered new listing again in November, wiping out hopes that a couple of months of small active inventory gains would carry into the New Year. The region went into the last month of the year with 1,150 active listings. That’s 1.45 months of inventory based on the current sales pace.
Inventory has been at the 1.45 level twice so far this year. It’s also the lowest active inventory level since the closing months of 2018, when the region slipped out of balanced market conditions.
The last time the market had balanced conditions was in Jan. 2018 when there was a 5.5-month inventory of existing single-family homes and condominiums for sale.
Market volatility resulting from the covid-19 omicron variant caused mortgage rates to decrease for the week ending Dec. 23; however, that’s probably not going to keep rates down very long. Much of the last two months pending sales increase was driven by buyers pushing to lock in the lowest rate possible before they continue the increasing trend that began in mid-October.
Mortgage applications were also down. According to the latest data from the Mortgage Bankers Association, the market composite index — a measure of total loan application volume — decreased 0.6 percent from a week earlier. The purchase index fell 3 percent, while the refinance index rose 2 percent. The refinance share of mortgage activity accounted for 65.2 percent of applications.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,600+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us