- Baltimore metro area home sales drops due to lack of interest
- High mortgage rates keep home buyers away from the market
According to Bright MLS, pending home sales dropped by 24% in February 2023 as compared with 2022.
Lisa Sturtevant, who is chief economist at Bright MLS said that the inventory of home remains very low as not only the buyers are reluctant to buy but even the sellers have kept themselves away from the market.
One of the reason for low inventory is that most of the home sellers are also buyers who are looking for upgrade or change of location but by selling now they they will loose the advantage of low mortgage rates which they had secured when interest rates were low. If they sell their home and buy new one they will end up paying mortgage rate of around 7% which will increase their monthly payment substantially.
The genuine buyers are also finding it difficult adjusting to this new higher mortgage rates. They expect the rates will fall and hence prefer waiting but the fact is that the interest rates are holding well and even expect to rise.
First time home buyers are the worst effected as most of them already have student loan as well as car loan which has resulted in already higher monthly outgoing and now they have to compete with the limited home inventory also.
Sturtevant also pointed out that from the data it is seen that the prices in Baltimore city is softening but the suburb are of Baltimore and many such cities still see price rise.
