Home prices continue to rise in central Pennsylvania but surging mortgage rates and shrinking affordability may be starting to dampen demand.
That’s the general trend for the region, according to April data, as countywide housing sales are either the same or lower than they were a year ago.
The Pennsylvania Association of Realtors reported that the median sales price of all houses closed in the state last month – $204,274 – hit the highest level in over five years. That’s up 13.4% over the same time last year.
“A lack of inventory continues to be an issue driving the home buying market,” Elle Hale, 2022 president of the Realtors Association of York & Adams Counties, said in a release. “For the first time this year, the number of home sales is slightly less than the same time period last year in York County.
“As interest rates have risen over 5% and home sale prices continuing to escalate, our concern is housing affordability. According to statistics compiled by the National Association Realtors, purchasing a home is 55% more expensive than a year ago.”
In York County, the 1,946 houses sold through the first four months of 2022 are 1% fewer than at this time last year. The 348 settlements in Adams County are the same.
The year-to-date median sales price of $265,270 in Adams is 13% more than the year before; the median sales price in York County is 8% more, up to $226,000.
In April alone, home sales numbers showed a 13.6% increase in Adams (from 95 to 108) and a 6.3% drop in York (from 568 to 532). Also last month, the median sales price in Adams was $281,000, a 13% increase from 2021. The median sales price in York County was $229,450, a 5% increase.
Hale said in a phone interview that mortgage rates are causing some buyers to be a little hesitant.
The jump in rates, which results in higher monthly mortgage payments, “is definitely helping to slow things down,” she said.
As to the persistent inventory shortage, “springtime usually brings more sellers, and that’s what we’re hoping for,” Hale said.
The difficulty for sellers, however, may be finding a home to move into.
“It’s great you want to sell,” she said, “but I want make sure you have somewhere to go.”
In April, closed sales fell in Cumberland County (274 to 269), Dauphin County (347 to 314) and Perry County (36 to 35).
The median sold price was up 9% in Cumberland ($267,000 to $290,950), 15% in Dauphin ($200,000 to $230,000) and 34% in Perry ($156,000 to $208,900).
Average days on market in April averaged between 16 and 19 among the three counties.
Sylvia Hess, 2022 president of the Greater Harrisburg Association of Realtors, said in an email that buyer demand remains strong, “though I believe we are seeing less offers per property. It depends upon price point, but where we had been seeing eight to 10-plus offers on certain properties (especially anything in the $200-$250k price range), some of those now are seeing one to three offers versus eight to 10.”
New listings continue to arrive, she said, “with active listings giving buyers a bit more inventory to choose from.”
Hess said rising mortgage rates have priced some buyers out of the market, “but they have not had a huge impact – yet.”
She predicted that rate increases will have more of a negative effect in the coming months, “especially if they crest 6% as predictors are indicating. Inflation is also a big factor in buyer affordability.”
“If sellers are sitting on the fence, they may want to move swiftly in listing their properties,” Hess said. “Contrary to what some are thinking, I don’t foresee a big ‘market shift’ by any means. I simply see the rate of price increases slowing from the breakneck pace we’ve been seeing, but still increasing. The same goes for buyers; it is still a great time to purchase.”
Citing the increases in equity over the last several years, she said that “those that purchased even a year ago are happy they didn’t wait.”
In Lancaster County, April home sales totaled 455, the identical number from April 2021. But they were up 21.3% from the previous month, climbing from 375.
The median sold price was $280,000, an increase of 12% from a year ago.
In April, average days on market was 13, and 342 of the houses sold last month went under contract between one and 10 days.
The average sold to original list price ratio was 104.7%, meaning numerous homes fetched more than their asking price.
Categories with the most sales were three-bedroom detached houses in the $200,000-$399,999 range and three-bedroom attached/townhomes in the $200,000-$299,999 range.
“I was glad to see an uptick in sales in April – we are still down 9.4% year to date, but April numbers were a bit of a surprise,” Greg Bardell, 2022 president of the Lancaster County Association of Realtors, wrote via email.
“I think when you look at the pending sales figures for April, we may see that translate into a bit of a dip again in May and June,” he said, as the industry starts to focus on mortgage rates and braces for the impact they may have the rest of the year.
Paula Wolf is a freelance writer.