New RI Real Estate Data: Tough News for Buyers - Prices Up, Interest Rates Up and Inventory Down
Thursday, June 16, 2022
There is more tough news for homebuyers in Rhode Island.
Inventory is down, prices remain at a record level and the cost of borrowing is racing higher.
In Rhode Island, single-family home sales fell year-over-year by 8% in May while the median price of those sales rose 14.8%, to $419,000, according to the RI Association of Realtors.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAnd interest rates are spiking and likely to go much higher.
According to the Wall Street Journal, "U.S. mortgage rates reached their highest levels in more than 13 years, the latest sign of market tumult tied to the Federal Reserve’s campaign to cool inflation."
The average rate on a 30-year, fixed-rate mortgage rose to 5.78%, mortgage-finance giant Freddie Mac said Thursday, the highest level since November 2008 and well above the 3.11% recorded near the start of the year.
Last week, Freddie Mac reported an average mortgage rate of 5.23%.
Rhode Island in Focus
If there was any good news for buyers it was that the number of homes for sale increased slightly over the previous few months.
Inventory continued to increase for the third consecutive month to a 1.5-month supply. While still well below the six-month supply indicative of a balanced market, May’s inventory of single-family homes for sale was the highest it has been since October of last year. The supply of homes available for sale takes into consideration the number of listings on the market in a given month and the rate of sales, according to the Realtors.
“Sales last year were fueled by low-interest rates. That market motivator is quickly dissipating. With the Federal Reserve hiking interest rates an additional three-quarters of a point this week, we’ll see the trend of multiple offers over asking price slow down considerably, which will in turn, increase inventory further,” said Agueda Del Borgo, president of the Realtors.
In the condominium market, sales activity and median price changes showed a downward trend in May compared to the single-family home market. Sales rose by 6.6% last month and the median sales price of those sales dropped 6.3% to $328,000. However, like the single-family home sector, a 1.5-month supply of condos for sale reflected growth, reported the Realtors.
The median price of multifamily home sales shot up to $430,000, an increase of 22.9% from one year prior. Sales fell 14.2%. The supply of multifamily homes increased to a 1.5-month supply as well.
"In the past six months, a mortgage of $300,000 has risen more than $500 per month. As home prices continue to escalate and mortgage rates climb, prospective Rhode Island homebuyers will retreat to the sidelines. While we welcome a reprieve from the inventory shortage, it’s important that we don’t diminish the economic benefits of the housing market which have buoyed up the economy in recent years,” said Del Borgo.
Related Articles
- Highest Providence Real Estate Sale in 2 Years - East Side St. Florian Mansion Sells for $3.05M
- The Arcade - Providence’s Most Unique Real Estate Buying Experience
- Out-of-State Real Estate Buyers - 21 Who Made a Difference in 2021
- Rutley on RI’s Lagging Real Estate Inventory and Are We Headed for a Correction
- Mott & Chace’s Blackstone Team Launches Black Real Estate Agent Scholarship & Mentoring Program
- Report: RI Real Estate Gobbled up by Out-of-Staters at Record Pace, Nearly 50% of Homes Over $1M
- This May Be the Major Reason Why RI Real Estate Prices Continue to Skyrocket
- Building Wealth Through Real Estate: Mott & Chace’s Masterson on Market Trends
- Real Estate Mega-Deal: Residential Properties Acquires Libby Kirwin Real Estate
- Providence Police Arrest Real Estate Exec in East Side “Porch Pirate” Case