Last week the Federal Reserve Board did not raise the Federal Funds Rate but it hinted that it will do so later this year. After the announcement, the stock market went down and the 30-year mortgage rate went up. Last month we evaluated the impact of the current 30-year mortgage rates (above 7%) on the local market (read that newsletter here). Because it takes 30-60 days to close on homes under contract, we concluded that real evidence would not be available for a couple of months.
Here is the chart from the Real Estate Information Network (REIN, our local MLS).
As you can see, while the number of active listings (available homes for sale) is lower, the number of settled (closed) sales is down more. This is causing the month’s supply of inventory to creep up to 1.68 for August 2023. It was 1.54 in July 2023 and 1.39 last August. The months’ supply of inventory is calculated by dividing the total number of homes listed for sale by the number of homes that go under contract. For example, if 100 homes are listed and 10 go under contract, that months’ supply of inventory would be 10 months. A balanced market is between 5 and 7 months. Despite the higher interest rates, and the somewhat slowing market, the number of homes on the market would need to almost double twice before we get into a balanced market.
Our title this month is also our trivia question. Of the approximately 53 million outstanding home mortgages, 32.33 million of them are under what fixed mortgage rate? Reply back to this email with your guess, and we will give you the answer next month.
If you are thinking about buying or selling, it is in your best interest to go ahead and give us a call (757-726-7653 for Lee, 757-434-9084 for Harry) or reply back to this email, and we will be happy to talk through your individual situation. We love real estate and are always happy to talk.
Don’t forget, we also manage rental properties and can help with your property management needs as well.
2023 Virginia REALTORS® Good Neighbor Award
The Virginia REALTORS® Good Neighbor Award recognizes REALTOR® members who make a positive impact on their community and gifts the organization through which they volunteer time and talents. This annual award seeks to highlight, inspire, and perpetuate the individual contributions within the real estate industry toward improving the lives of citizens in Virginia.
What’s Happening in Suffolk
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SUFFOLK PEANUT FEST
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The Market offers an array of fresh local produce, beef, poultry, eggs, honey, baked goods, pickled vegetables, jams, plants and flowers, handmade soaps, candles, garden and farm décor, jewelry, and other artisan crafts.