Central Kentucky home sales were down 35% this November. Will buyers get a break in 2023?
Your pipes aren’t the only thing that need thawing out.
Total home sales in Central Kentucky were down almost 40% year-over-year in November, largely mirroring a nationwide chill on such activity in what the National Association of Realtors calls a “frozen” market.
“In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020,” NAR chief economist Lawrence Yun said in a news release outlining the findings.
What’s to blame? Interest rates that are still twice what they were at the start of 2022. But mortgage rates have shown some signs of softening in recent weeks, which has economists questioning whether to expect a steady decline in the new year.
According to Bankrate.com, and as of Dec. 23, the national average for a 30-year, fixed rate mortgage stood at 6.47%. That’s up from 3.22% for the first week of 2022, according to Freddie Mac.
This has led to a 10-month streak of declining home sales, with such activity sliding 7.7% from October to November, according to the NAR.
“The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes. Plus, available housing inventory remains near historic lows,” Yun said.
The housing market in Lexington and Central Kentucky
The latest market analysis from Bluegrass Realtors shows the number of home sales in the region was down 35% in November compared to a year earlier. This November, home sales were at 947, down from 1,447 in 2021.
It’s the first time since before the coronavirus pandemic that total transactions in the region have dropped below the 1,000 mark.
Bluegrass Realtors has members in 30 Kentucky counties, including Anderson, Bath, Bell, Bourbon, Clark, Clay, Elliott, Estill, Fayette, Franklin, Harrison, Jackson, Jessamine, Knox, Laurel, Lee, Madison, McCreary, Menifee, Montgomery, Nicholas, Owsley, Powell, Pulaski, Rowan, Russell, Scott, Wayne, Whitley and Woodford.
As for median home prices, they’re up compared to last year, but according to Bluegrass Realtors President Rusty Underwood, that price appreciation is beginning to level off.
In Fayette County, according to data from the association, median home prices rose from $255,000 in 2021 to $295,000 in 2022. That’s a 16% increase.
Conversely, 328 homes sold in Fayette County in November 2021, compared to 280 homes so far in 2022. That marks a 15% decrease.
“Sellers that bought a home in the last several years who have a mortgage payment likely obtained a rate that is substantially lower than what can be found in today’s market,” Underwood said in the analysis.
“This is keeping some potential sellers in their current property, which limits the number of new listings coming to market. Some sellers that would ultimately be turning into buyers have been waiting for a softening in rates, which has been happening over the past couple of weeks,” Underwood added.
That means homebuyers who’ve been waiting for the housing market to thaw out will have to wait a little longer.
Editor’s note: This headline has been updated for clarity.
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This story was originally published December 29, 2022 at 10:42 AM.