Home sales down for the first half of 2022: “If people absolutely must not move, they are waiting to see what happens” | Company

The number of homes sold in the Baton Rouge metro in the first half was down 8.4% from the first six months of 2021 as rising interest rates caused a slowdown in activity.

There were 6,529 homes sold through the end of June, according to figures released Monday by the Multiple Listings Service of the Greater Baton Rouge Realtors Association. This compares to 7,128 service sales through the end of June 2021.

Broken down by parish, home sales fell 0.9% in Livingston, 6.2% in East Baton Rouge and 18.5% in Ascension.

Kristina Cusick, broker and owner of Town & Parish Realty in Prairieville, said it’s not just interest rate increases that’s causing slower sales. Rising gas, food and electricity prices are taking their toll.

“If people absolutely shouldn’t move, they’re waiting to see what happens,” said Cusick, who is treasurer of the GBRAR board.

The average rate for a 30-year fixed-rate mortgage was 5.51% on Thursday, according to Freddie Mac. That’s up from 3.22% at the start of the year. Rates are expected to rise further; the Federal Reserve is expected to raise rates perhaps as much as a percentage point at its meeting next week in a bid to slow the economy and bring inflation under control.

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In a sign that home sales will continue to lag the pace of 2021, the number of pending sales fell 16.2% in the first half. Pending sales are an indicator of future activity. Monthly pending sales figures have been more than 20% lower than 2021 figures since March.

Despite the bad signs, Cusick said she was telling her officers not to panic. Things are different from the housing market crash of 2008 due to lending to borrowers with poor credit. Lending standards have since been tightened.

“It’s more of a market correction that we’re seeing,” she said. Home sales are up 14.4% for 2020 and 10.9% for 2021. This has led to a tight inventory of properties for sale, with sellers in some cases receiving as many as a dozen offers for their homes.

But the stock of homes for sale rose slightly in the first half of the year, giving people looking for a home more choice. At the current rate of sales, the inventory of homes for sale in the area would last 1.7 months. That’s low – a balanced market has about six months supply in inventory – but higher than the 1.4 month supply in June 2020.

“The ball was in the seller’s court for a long time,” Cusick said. “We are moving closer to a more balanced market. It’s not a terrible thing. We were really on the verge of having an affordability problem.

Even as sales slowed and inventory rose, home prices in Baton Rouge’s metro continued to rise. The median home price was $252,303 in the first half, up 7.4% from $235,000 in 2021.