After home sales in Delaware dipped in April, they rebounded in May by 21.1% to the highest level of 2023 so far.
Sales climbed from 794 in January to 889 in February and to 1,139 in March, then dipped to 1,022 in April, before bouncing back to 1,238 in May.
“Despite the higher interest rates these last couple of months, the uptick in home sales tells us that buyer confidence is increasing and that the quality of life a home provides is more important to buyers than today’s interest rates,” said Chrissy Steele, president of the Delaware Association of Realtors.
The data is a lagging indicator of buyer activity.
“Sales closing in May typically represent the sales prices and contract terms that were negotiated in March and April,” Steele said.
Nationally, home sales also rose in May but not as sharply, by just 0.2% to a seasonally adjusted annual rate of 4.3 million.
Lawrence Yun, chief economist at the National Association of Realtors, said mortgage rates heavily influence the direction of home sales.
“Relatively steady rates have led to several consecutive months of consistent home sales,” Yun said.
Usually, a homebuyer secures a mortgage rate one to two months before the sale is completed, so for a home sale in May, the interest rate was probably secured in March or April.
According to Mortgage News Daily, average rates on a 30-year mortgage in March hit a peak of 7.1% March 3 and then fell most of the rest of the month, hitting 6.38% March 24. In April, rates were as low as 6.16% April 5 and as high as 6.75% April 19.
Average rates a year ago in March and April ranged from 3.9% to 5.4%.
The sales figures reflect that change in rates. Compared with one year ago, sales were down in the First State and the U.S.
Delaware sales declined 16.2% from 1,478 in May 2022, while the national number dropped 20.4% from 5.4 million in May last year.
Home prices slightly higher in Delaware, lower in U.S.
In Delaware, the median home sales price increased by 0.29% in May to $363,000 compared with $361,950 a year ago. It declined slightly (0.22%) from April when the median price was $363,818.
Nationally, the median home price in May was $396,100, down 3.06% from $408,600 a year ago, but higher by 1.88% from April when the median price was $388,800.
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Supply of homes for sale increases
The active inventory of homes for sale in Delaware was 2,640 in May, up 4.8% from 2,519 in April and up 13.8% compared with 2,319 one year ago.
“While we’re still in a strong sellers’ market, homebuyers have more homes to choose from today than they have over the last year,” Steele said.
However, inventory is still low historically, which highlights Delaware’s affordable homeownership crisis, she said.
Homes were on the market in Delaware for an average of 33 days in May, down from 35 days in April, but up from 17.67 days in May 2022.
“When entry-level homes are priced according to the market conditions, buyers should expect strong competition and less flexibility in contract terms,” Steele said.
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In the U.S., active inventory in May was 1.08 million units, up 3.8% from April but down 6.1% from 1.15 million one year ago.
Nationally, homes were on the market for an average of 18 days in May, down from 22 days in April but up from 16 days in May 2022.
Reporter Ben Mace covers real estate and development stories. Reach him at rmace@gannett.com.
