Home sales in Maine last month told a familiar story, with more signs the market is shifting: Interest rates inched back down, prices are now only increasing by single-digit percentages and two Maine counties actually reported price decreases from November 2021 levels.
The statewide median sales price for homes sold last month was $325,000, an 8.3% increase over the price in November 2021, and a decrease from the October median of $332,000, according to figures released Wednesday by the Maine Association of Realtors. November was the third consecutive month with a single-digit year-over-year price increase after more than two years of double-digit hikes.
The median is the price at which half the homes sold for more money and half sold for less.
A total of 1,289 homes in Maine changed hands last month, a 19.4% decrease from October and a 28.7% decrease from November 2021.
For-sale inventory remains historically low with 13% fewer homes on the market last month than in October, and 58% fewer homes for sale than in November 2019, before the pandemic, said Madeleine Hill, the association’s president and a broker with Roxanne York Real Estate in Harpswell.
“While demand remains steady for Maine’s tight for-sale inventory, increased mortgage interest rates, coupled with the typical holiday slowdown, have impacted the market,” she said.
The average rate in buyer contracts for a 30-year, conventional fixed-rate mortgage was about 6.7% in November, down from 6.9% the month before. Rates peaked at 7.1% in mid-November and have been declining since.
The recent rapid increase in mortgage rates made housing less affordable and reduced incentives for homeowners to list their homes, worsening the existing inventory crunch, according to Lawrence Yun, chief economist for the National Association of Realtors.
“In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020,” he said.
But a few weeks later that frozen market seems to be thawing, Yun said. Mortgage rates have fallen for five straight weeks, and the average monthly mortgage payment is now almost $200 below what it was just a few weeks ago when interest rates peaked.
As of last Thursday, the most recent data available, the average 30-year fixed mortgage rate was 6.3% according to mortgage buyer Freddie Mac. The average commitment rate across all of 2021 was 2.96%.
According to Freddie Mac, it’s a good news-bad news situation for the housing market.
The good news is that recent declines in rates have led to stabilization in purchase demand, Freddie Mac said in a news release. The bad news is that demand remains weakened because of affordability hurdles that are still quite high.
COUNTY, NATIONAL DATA
All 16 counties experienced fewer sales, but two counties bucked the long-running trend and saw prices dip for the three-month period ending Nov. 30. (The real estate association also looks at three-month data for county comparisons to get a larger sample size of sale transactions.)
Prices fell by 8.3%, from $290,000 to $266,000, in Waldo County; and by 4.4%, from $339,750 to $324,900, in Hancock County.
In Cumberland County, the median price was $485,000, an increase of 10.4% over the same period a year earlier, and the highest median price in the state.
Aroostook County saw a 10.2% price increase, but at $146,000, the county remains the one with the lowest home prices and is three times less expensive than Cumberland County.
Washington County saw the largest price increase, but the 18.7% jump is substantially lower than the 30% and 40% increases that have been commonplace elsewhere in Maine during recent months.
From September 2021 through November 2021, Washington County homes sold for an average of $168,500. In the same three-month period this year, they sold for an average of $200,000.
Sales declined most sharply during that period in Lincoln County, which experienced a 32.2% drop from 199 homes to 135.
Nationally, sales fell 35% from November 2021, and prices rose 3.2% to a median of $376,700, according to the National Association of Realtors. While still an increase from a year ago, November marks the fifth consecutive month that the median sales price has declined since peaking at $413,800 in June.
Regionally, sales fell 28% last month from the year before, while the median price in the Northeast rose by 3.5% to $394,700.
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