Existing home sales are down in February both here in St. Louis and nationwide, according to the most recent reports. The trends of the past six months appear to be continuing, as high demand and low inventory push prices up. The market is still extremely competitive. There are signs, however, that this red-hot market may be cooling down.
According to data from the National Association of Realtors, the number of existing home sales dropped 6.6% in February from the previous month. The seasonally adjusted rate was 6.22 million units. While slow compared to January, this is still an increase of over 9% from February of last year.
The report also revealed that the median home price has risen in response to the historically low inventory and high demand. Over the last year the median home price increased by 15.8% to $313,000 as of February 2021. Inventory is down dramatically, by 29.5% from the same time last year. Currently there is only a 2 month’s supply of homes on the market, if they continue selling at the same rate.
This is reflected locally as well. According to the most recent data from Zillow, over the last year home values have gone up 9.7% in St. Louis County and and 14.8% in the City of St. Louis. The typical values for a home in the county and city, according to Zillow’s index, are $217,981 and $146,648 respectively.
One key indicator that the market may be shifting is the rise in interest rates. Historically inexpensive mortgages have been a major factor driving competition in the housing market. Recently, the interest rate on a 30-year mortgage has risen above 3% for the first time in months. If this trend continues, it will go a long way towards cooling the red-hot market.