- March home sales in Delaware jumped by more than 25% compared to February.
- Sales across the U.S. dipped 2.4%.
- Median home sales prices in Delaware fell in March compared to February, but were higher than March 2022.
Home sales in Delaware were stronger than in the U.S. as a whole., jumping 28.1% in March compared with February.
After 889 sales in February, the number climbed 28.1% to 1,139 in March.
“I attribute the higher sales in March over February to the typical increase in spring activity,” said Chrissy Steele, president of the Delaware Association of Realtors.
Nationwide sales showed a decline of 2.4% in March compared with February, said National Association of Realtors chief economist Lawrence Yun.
“Home sales are trying to recover and are highly sensitive to changes in mortgage rates,” said NAR Chief Economist Lawrence Yun. “Yet, at the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It’s a unique housing market.”
Sales lower than 2022
Compared with last year, sales dipped in Delaware and the country.
In Delaware, sales dropped 19.5% from 1,415 in March 2022. Across the nation, the numbers fell 22% from March 2022.
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Home sales prices show mixed results
In Delaware, the median sold price in March was $342,983, down from $356,330 in February but higher compared with $325,853 in March 2022.
Nationally, the median sold price in March was $375,700, up from $363,000 in February, but down from $379,300 in March 2022.
Steele said several factors influence prices including location of the home, available inventory in the area and interest rates.
“But in general, we’re seeing more negotiations happen between buyers and sellers,” she said. “We’re also seeing an uptick in price repositions, indicating the market does not support aggressive listing prices.”
Active inventory of homes for sale in March was 2,493, up from 2,429 in February and from 1,996 in March 2022.
“This is a positive sign for the Delaware real estate market,” said Steele, with more homes on the market for buyers to choose from.
Other trends Steele said Realtors are reporting in Delaware include a slight increase in the days a home is listed on the market and more price repositioning. But if a home is priced competitively, demand from buyers is strong.
The average days a home was on the market in March was 38, compared with 34 in February and 25 in March 2022.
The biggest problem in the Delaware real estate market is the lack of lower-priced homes, Steele said, calling it “an affordable homeownership crisis.”
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One of the solutions, she said, is for the state to lower the real estate transfer tax back to the rate in 2017 when the state raised its portion of the tax from 1.5% of the sales price to 2.5%, the highest state transfer tax in the country.
The transfer tax is “a homeownership barrier to many entry-level buyers,” Steele said.
Interest rate expectations
Yun predicted a decline in mortgage rates, which should boost home sales.
“With overall consumer price inflation calming and rents expected to decelerate from robust apartment construction, the Federal Reserve’s monetary policy will surely shift from tightening to neutral to possibly loosening over the next 12 months,” he said. “Therefore, home sales will steadily rebound despite several months of fluctuations.”
Home sales contracts may take a month or two from the time a mortgage rate is locked in, so March sales are likely based on interest rates in January or February.
The 30-year mortgage rate in January and February ranged from about 6% to 6.5% until spiking at the end of February to near 7%, according to Mortgage News Daily. As of May 8, the 30-year fixed-rate average was 6.65%.
Reporter Ben Mace covers real estate and development news. Reach him at rmace@gannett.com.
