As Lubbock heats up, the housing market cools
As temperatures climb higher, the Lubbock real estate market began a long-anticipated cool down. Home sales saw their first significant decline of 2022, a product of long-diminished housing inventory, record high-prices and, most recently, rising interest rates. The slow down helped boost housing inventory to 1.5 months, the most supply of homes since October 2021.
According to the Lubbock Association of Realtors’ (LAR) June 2022 Market Update, single-family home sales fell 14.8 percent, marking the third consecutive monthly year-over-year decline with 493 units sold compared to 578 in June of 2021. On a year-to-date basis, sales are down 5.1 percent, with 2,432 sales compared to 2,562 through June 2021.
The continued lack of below-$250,000 housing inventory is driving consumers to look at homes above $300,000, even with higher interest rates. Mortgage did see some relief in the first week of July, with Freddie Mac reporting that the average interest rate on a 30-year fixed-rate loan fell from 5.7 to 5.3 percent – the biggest decline since 2008. However, an average rate of 5.3 percent is well above the average rate of 2.67% on 30-year fixed-rate loans that prevailed in December 2020. It is still higher than rates have been over the course of most of the past decade.
While sales fell, home prices climbed, with the median price of a single-family home rising 13.7 percent to $250,000.
For the fourth straight month, the ‘Close to Original List Price Ratio’ for single-family homes was above 100 percent at 100.2 percent. This means that even with inventory increasing, buyers are still making offers above list price for homes on the market.
June Monthly Market Comparison
With would-be homebuyers facing record prices, rising interest rates, a limited supply of homes on the market and growing inflation, homes sales were bound to slow. Single-family home sales declined 14.7 percent, and home sales sales are down 5.1 percent year-over-year.
Active listings (the total number of available properties) saw another dramatic increase, up 31.8 percent compared to June 2021 and total dollar volume for June rose 8 percent to $703 million.
With an influx of new listings, months of inventory reached a 1.5-months supply, the highest level since October 2021 when it was 1.3 months. Housing inventory statewide increased substantially, at 2.1-months supply according to the latest report from Texas Realtors (TR), while nationally there is a 2.6-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.
Lubbock Association of REALTORS® Multiple Listing Service represents residential property sales for more than 1,650 REALTORS® in the Lubbock area.