Rising mortgage rates nudge Tri-Cities home prices lower

Published 12:01 pm Friday, October 7, 2022

Rapid mortgage rate increases are nudging Tri-Cities’ short-term home prices lower. September’s typical price dropped to a three-month low. It’s still almost 15 percent higher than last year, but prices are coming off the plateau they’ve been on since June. At the same time, sales continued a downward arch that began in July. Last month they were 18 percent lower than September last year and dropped below the pre-pandemic level for the first time.
“These are clear signs that the market has reached an inflection point and a transition is underway,” said Rick Chantry, Northeast Tennessee Association of Realtors (NETAR) president. “The average 30-year mortgage rate has doubled from this time last year, and some think the average will be in the historical 7 percent to 7.5 percent range. That’s boosted the typical mortgage payment upwards of 45 percent, sidelining some buyers who rely on income rather than wealth to buy a house.”
It’s also noteworthy that more of last month’s sales were discounted from the asking price and those that sold above the listing price, Chantry added. Sellers reduced their price on 302 sales. The average reduction was $17,193. There were 216 sales above the asking price. The above average was $9,043.
There were 729 closings in September. That’s 49 fewer than August and 138 fewer than September last year. The final monthly sales number typically increases when late filings are added in the mid-month update.
Last month’s median existing-home sales price was $235,00. It was $245,000 in July and August. It peaked at $250,000 in May.
Active inventory was up eight properties and down 75 from last year. New listings have slowed, which is typical for a market entering the fall season. At the end of September, the region had 1.7 months of inventory. That’s how long it would take to sell everything on the market at the current sales pace. “Supply has been flat for the past three months,” Chantry said.
The typical home sale that closed in September was on the market for 47 days. Average listings are still going under contract in about two weeks or less.
Last month, sales were down in 11 of the region’s 16 city and community submarkets.
The typical sales price was up in 12 markets.

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