- October home sales in Delaware fell by 19.94% compared to September.
- Nationally, sales dipped 5.9% from September.
- Median home prices in October rose statewide and nationally.
The housing market in Delaware continues to cool off with home sales dipping for the second straight month at a much faster rate than national sales.
In October, Delaware home sales fell by nearly 20% from September and by more than 30% compared with October last year.
The 1,084 sales in October were 19.94% lower than the 1,354 in September, and down 32.08% from October 2021 sales of 1,596, according to the Delaware Association of Realtors.
Across the U.S., October sales dipped 5.9% from September to a seasonally adjusted annual rate of 4.43 million in October, the National Association of Realtors reported.
Year-over-year, U.S. sales dropped by 28.4% from an annual rate of 6.19 million in October 2021.
“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” said Lawrence Yun, chief economist at the National Association of Realtors.
Sales fall, but prices jump
Nationally, unsold inventory at the end of October was at a 3.3-month supply, up from 3.1 months in September and 2.4 months in October 2021.
“Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” Yun added.
In Delaware, the median sales price in October was $348,609, up 8.94% from $320,000 in September and up 2.74% from $339,309 in October 2021.
Nationally, the median existing-home price in October was $379,100, a gain of 6.6% from $355,700 in October 2021, as prices rose in all regions. This marks 128 consecutive months of year-over-year increases, the longest-running streak on record.
Interest rates rose in October
The average rate for a 30-year conventional fixed-rate mortgage was 6.90% in October, up from 6.11% in September, according to the Federal Home Loan Mortgage Corp.
The average rate for all of 2021 was 2.96%.
“Mortgage rates have come down since peaking in mid-November, so home sales may be close to reaching the bottom in the current housing cycle,” Yun said.
Declines in home building
In October, starts for new home construction decreased 4.2% from September to a seasonally adjusted annual rate of 1.43 million units in October, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Single-family starts decreased 6.1% in October compared with September to a seasonally adjusted annual rate of 855,000. Year-to-date, single-family starts are down 7.1%. In the multifamily sector including apartment buildings and condos, building starts dipped 1.2% in October to an annualized pace of 570,000.
This year will be the first since 2011 to post a decline in single-family starts, according to the National Association of Home Builders.
“Mirroring ongoing falloffs in builder sentiment, builders are slowing construction as demand retreats due to high mortgage rates, stubbornly elevated construction costs and declines for housing affordability,” said Jerry Konter, the association’s chairman.
To bring more buyers into the marketplace, 59% of builders report using incentives. In November, 25% of builders say they are paying points for lower interest rates for buyers, up from 13% in September. And 37% of builders cut prices in November, up from 26% in September, with an average price of reduction of 6%.
“Even as home prices moderate, building costs, labor and materials – particularly for concrete – have yet to follow,” said National Association of Home Builders chief economist Robert Dietz.
Signs of optimism in November
While October home sales showed steep declines, the Mortgage Bankers Association reported an increase in mortgage applications in mid-November after a slight decrease to start the month.
Mortgage applications dipped 0.1% for the week ending Nov. 4 compared with the previous week.
But then applications rose 2.7% for the week ending Nov. 11 and another 2.2% for the week ending Nov. 18.
That’s while the 30-year fixed-rate mortgage fell for the second week in a row to 6.67% and is now down almost a half-percentage point from the recent peak of 7.16% one month ago, said Joel Kan, deputy chief economist at the Mortgage Bankers Association.
Reporter Ben Mace covers real estate, housing and development stories. Reach him at rmace@gannett.com.
