Greater Louisville Home Prices Continue to Increase Despite Fewer Sales in May
Louisville, KY (June 24, 2022) - Home sales in Greater Louisville declined again in May due to low supply and rising interest rates, according to the Greater Louisville Association of Realtors (GLAR).
Total existing home sales, including single-family homes, condominiums, and townhomes, decreased 13.74% from 1739 in May 2021 to 1500 in May 2022.
Record demand combined with extremely low supply continues to fuel price increases. The median home sale price in May was $260,000, up 12.80% from $230,500 in May 2021. The average home sale price was $299,857, up 10.16% from $272,212 in May 2021.
Months of supply in the Greater Louisville market remained extremely low but exceeded 1 month for the first time this year. The absorption rate was 1.02 months compared to .91 months the previous month, reflecting a strong seller’s market. A balanced real estate market offers between three and six months of supply.
“The Louisville market has slightly subsided since interest rates began to rise but there is undoubtedly more demand than supply,” said GLAR President Paula Barmore. “Interest rates remain historically low despite the recent increases, and local real estate continues to attract buyers from more expensive markets that are more impacted by higher interest rates.”
According to Freddie Mac, the 30-year fixed mortgage rate rose to 5.78% on June 16 from 5.23% the previous week and 5.3% the previous month.
National Association of Realtors Chief Economist Lawrence Yun says home sales have returned to pre-pandemic levels in 2019 but emphasizes the need for more inventory.
"Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year," Yun added. "Nonetheless, homes priced appropriately are selling quickly and inventory levels still need to rise substantially – almost doubling – to cool home price appreciation and provide more options for home buyers."
Click here for more real estate market statistics from GLAR.
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