The second quarter of 2023 saw increasing interest rates for potential homebuyers nationwide. Demand for new homes locally, in the Reno-Sparks real estate market, and nationally has slowed in response.
The Purchase Applications Index shows a significantly low number of new home-buying applications, like 1996 and 1997. On the opposite side, home inventory is at a historic low as homeowners do not want to risk the market with increasing interest rates. Mainly, these opposing forces sustain and keep the housing market in a state of equality between demand and supply.
Dive into the second quarter national and Reno-Sparks real estate trends in my video
Reno-Sparks real estate trends
- Rounding out an excellent first half of 2023, June saw a 3.6% increase in the median home sale price to $554,900. While this is a decrease of 4.2% year-over-year, the market has started to cover the gap.
- 438 homes sold in June, a 5% increase month-over-month and just a 3% decrease year-over-year. Year-over-year changes are likely to continue getting smaller, as in June and July of 2022, when mortgage rates began to affect demand dramatically.
- New contracts increased in the Reno-Sparks real estate market by 8.7% month-over-month, a sign of potentially growing market demand.
- The Reno-Sparks area had a 2.4% increase in new home listings in June, with a total of 557. Year-over-year, this is still a decrease of 34%, but any increase in new listings is a healthy sign of increasing supply.
- Active inventory continues to maintain at very low levels. While June saw an increase of 4.6% to 720 homes, that’s still only half of what would be expected in a healthy local housing market.
- Days to contract increased from 14 days in May to 16 days in June. Historically speaking, this is a short period of days to contract compared to the average of 30-45 days.
- Sellers consistently receive an average of 99.1% of asking price, historically the average for the Reno-Sparks real estate market. This indicates healthy demand in the market, though the low inventory keeps demand and supply in equilibrium in today’s market.
National real estate trends
- Delinquency status on mortgages is at an all-time low, and homeowner equity nationally has crossed the $30 trillion mark.
- 40% of all US homes have no debt on them at all, and current homeowners are averaging significantly high credit scores. This, in combination with low delinquency rates, is good news as the market is unlikely to be flooded with shadow inventory.
- New inventory is at a historic low, down from the previous lows of 2021 and 2022. June this year had 63,000 new listings, while June of 2022 had 77,000 new listings.
- The number of purchase applications in 2023 has mirrored the numbers in 1996 and 1997, indicating low demand in the nationwide housing market.