Great news for first-time home buyers and those looking to purchase a home in Nebraska! According to a report released by the National Association of Realtors in March 2023, the median price of existing homes in the United States saw a decline of 0.2% in February, marking the end of over a decade of year-over-year increases. The median price for an existing home was $363,000 in February, marking the first year-over-year decline in 131 consecutive months.
This is excellent news for those who have been holding off on purchasing a home due to rising prices. As median home prices are lower than the previous year, US home sales surged in February, following a full year of declining home sales due to surging mortgage rates and prices that remained elevated, which kept homebuyers out of the market. February's reversal in sales also ended the longest streak of month-to-month declining home sales on record, going back to 1999 for all homes and 1968 for single-family homes.
Sales of existing homes, including single-family homes, townhomes, condominiums, and co-ops, shot up 14.5% in February from January. While sales were down 22.6% from a year ago, the seasonally adjusted annualized sales pace dropped from 5.92 million units a year ago to 4.58 million. This is a steep decline in sales activity driven by the large increase of mortgage rates over the past year.
Mortgage rates remain volatile, but prices are cooling. "Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines," said Lawrence Yun, NAR's chief economist. "We're seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs."
Inventory levels remain low, with total housing inventory at the end of February at 980,000 units, the same as last month, and up 15.3% from one year ago. Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months a year ago. However, the housing market remains undersupplied, so well-priced, well-maintained listings are likely to draw buyer attention.
As high prices and elevated mortgage rates continue to stifle buyer activity, this spring's market is expected to be toned down relative to the last couple of years. However, this could be a great time for first-time home buyers or those looking to purchase a home due to the lower median prices. With the housing market undersupplied, it's important to act fast when you find a well-priced, well-maintained listing that fits your needs.
Home sellers considering putting their home on the market will still be in a strong position to cash in on home equity, she said, since low inventory and strong demand to buy have kept prices strong in many places. "But the dwindling buyer pool makes the task more challenging," Jones said.
Home sales remain well below last year's level, signaling that significant affordability gains must be made before buyers are able to return to the market en masse. However, as the weather warms up and the end of the school year approaches, buyer and seller activity usually picks up.
Overall, this is an exciting time for those looking to buy a home in Nebraska. With lower median prices and a surge in sales, the housing market is becoming more accessible for first-time home buyers and others looking to purchase a home.
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