As mortgage rates and average prices rose, home sales fell in the region and state in September.
“We are seeing a downturn in the market right now,” Heather Weeks, realtor at Exit Preferred Realty and 2022 president of Pen-Mar Realtors, wrote in an email. “Some of that is seasonal, as we head into the winter months. However, there are also a lot of potential buyers who can’t afford the cost of higher mortgages.”
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Depending on the specifics of a real estate transaction, higher mortgage rates can add hundreds of dollars to a monthly mortgage payment, officials said.
In Maryland, only Allegany County saw more homes sold in September than the same month a year ago, according to numbers recently released by Maryland Realtors and Pen-Mar Realtors. Seventeen of the state’s 24 jurisdictions reported higher average prices.
Higher mortgage rates = higher payments
“The local market is beginning to feel the pinch of higher interest rates. The looming threat of further rate hikes is causing anxiety in the housing sector. We are heading into uncharted territory,” Weeks wrote in the e-mail.
“Homes that were affordable this summer now feel out of reach for some buyers, due to rising monthly mortgage outlays. People are definitely feeling (the) impact of higher interest rates.”
Gabe Fortmann of Academy Mortgage provided a simple example of what these higher rates mean.
In September 2021, the average sale price of a home in Washington County was $273,214. At the time, mortgage rates were around 3%, resulting in a monthly payment of $1,152, Fortmann wrote in an email.
Now, with a mortgage rate of around 6%, that payment would be $1,638, a difference of $486.
“If clients did not purchase the home in 2021, they would need to modify their search for homes in the $205,000 price range,” Fortmann wrote in an email.
He pointed out that real transactions are more complicated and many factors, such as a person’s credit score, come into play.
What’s going on in Washington County?
Homes sold in Washington County fell 27.9% from 222 in September 2021 to 160 last month.
Meanwhile, the average price rose 9.3% from $273,214 to $298,504. The median price jumped 11% from $246,500 to $273,500. The median is the midpoint, with half the homes selling less and the other half selling more.
Homes spent an average of 19 days on the market in September, compared to 18 in September 2021.
Similar story to Hagerstown
In the Hagerstown market, sales fell 38.1% from 168 in September 2021 to 104 last month.
The average price increased by 11%, from $257,909 to $286,169. The median price also jumped 11%, from $240,000 to $266,500.
Homes spent an average of 16 days on the market, compared to 20 previously.
A look at the market in Franklin County, Pennsylvania
Franklin County, Pennsylvania saw a 12% drop in sales, from 184 in September 2021 to 162 last month.
The average price increased by 10% from $244,373 to $268,741. The median price jumped 14.9% from $220,000 to $252,700.
Homes spent an average of 23 days on the market, compared to 17 in June 2021.
In the Chambersburg market, sales fell 20% from 75 to 60. The average price rose 12.8% from $241,965 to $273,002. The median price increased by 10%, from $214,900 to $236,500.
Average days on market increased from 18 to 21.
“It’s a market in transition”
For Maryland as a whole, sales fell 28.6%, to 6,748, and average prices climbed 4.8%, to $449,125, across Maryland, according to the Maryland Realtors report. Median price jumped 4.3% to $386,000
Montgomery County had the most sales, at 934. Somerset County had the fewest, at 24.
Talbot County recorded the highest average price, at $808,739. Allegany County had the lowest, at $146,229.
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“Even though mortgage interest rates fell slightly last week, the rate itself is significantly higher than it was a year ago, and while prices continue to rise, with each month goes by, the rate of price increases is further decreasing,” Yolanda Muckle, 2023 President of Maryland Realtors, said in a press release.
Other signs in the housing report that suggest a slowdown include a 26.5% drop in pending sales (homes under contract) and a 22.1% drop in new listings, compared to a year ago.
“It’s a market in transition,” Muckle said. “Inventory taking longer to move, prices rising but not as fast as before, and mortgage rates – despite this slight drop – likely to rise. If you’re looking to buy or sell your home , I would suggest you do it now because mortgage rates are likely to go up.
Mike Lewis covers business, economics and other issues. Follow Mike on Twitter: @MiLewis.
September home sales, prices
The following statistics for select jurisdictions in Maryland list the number of homes sold in September and the average prices, with the percentage change from the previous year.
- Allegany County: 73 (up 23.7%); $146,229 (6.1% increase)
- Frederick County: 419 (down 27.4%); $495,256 (9.2% increase)
- Garrett County: 56 (down 25.3%); $487,883 (down 26.8%)
- Washington County: 160 (down 27.9%); $298,504 (9.3% increase)
- Maryland: 6,748 (down 28.6%); $449,125 (4.8% increase)
Source: Maryland Realtors