Home sales declined in May for the second straight month even as prices climbed to new record highs and mortgage interest rates continued their upward trend. Consumer demand remains high, with properties below $300,000 being snapped up almost as quickly as they were listed. Housing inventory increased for the first time since January, which could be a good sign for buyers whose choices have been slim for quite some time.
According to the Lubbock Association of Realtors’ (LAR) May 2022 Market Update, single-family home sales fell 7.8 percent, marking the second consecutive monthly year-over-year decline with 437 units sold compared to 474 in May of 2021. On a year-to-date basis, sales are down slightly at 2.5 percent, with 1,934 sales compared to 1,984 in May 2021.
The continued lack of below-$250,000 housing inventory has driven consumers toward more expensive properties. Mortgage rates are still on the rise with the average rate on a 30-year fixed rate mortgage up to 6.059 percent as of June 7.
Home prices continued a record setting trend, with buyers pushing Lubbock area home prices to new highs. The median price of a single-family home rose 9 percent to $249,200. The average price for a single-family home in Lubbock first broke the $260,000 mark in March of this year.
For the third straight month, the ‘Close to Original List Price Ratio’ for single-family homes broke the 100 percent mark, rising 100.8 percent — the highest percentage ever. That means that a majority of buyers paid above list price for homes on the market.
May Monthly Market Comparison
Between home prices reaching historic highs and mortgage interest rates on the rise, the Lubbock real estate market eased up a bit in May as some consumers put off purchases, perhaps hoping for interest rates to drop. Single-family home sales declined 7.8 percent, and home sales sales are down 2.5 percent compared to last year’s record pace.
Active listings (the total number of available properties) jumped a whopping 37.5 percent and total dollar volume for May rose 10.8 percent to $556 million.
Helped by a 11.3 percent increase in new listings, months of inventory reached a 1.2-months supply, the highest level since October 2021 when it was 1.3 months. Housing inventory for the state stands at a 1.5-months supply according to the latest report from Texas Realtors (TR), while nationally there is a 2.2-months supply, according to the latest report from the National Association of Realtors (NAR). A 6.0-months supply is traditionally considered a “balanced market,” in which neither the buyer nor the seller has an advantage.
The Lubbock Association of REALTORS® Multiple Listing Service includes residential properties and new homes listed by 1,650 REALTORS®.