Home sales in the San Antonio area fell in May, the second month in a row of declines, as more potential homeowners were sidelined by soaring mortgage rates and record prices.

Buyers purchased 3,580 homes in Bexar and surrounding counties last month, down 2% from May 2021, according to the San Antonio Board of Realtors.

This is a smaller drop than in April, when sales fell 7.6% from last year.

The median home price in the area soared to a new high of $348,800. This is 24 percent, or $68,200, more than in May 2021. The combination of rising prices and mortgage rates is making homeownership even more out of reach for more people.

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This leads to a decrease in demand and a slight increase in the supply of homes for sale, according to data from the association. Inventories rose slightly to 1.8 months in May from nearly 1.3 months a year earlier. Six months is usually considered a balance between buyers and sellers.

However, houses were moving faster than a year ago. The average time on the market last month was 27 days, compared to 34 days in May 2021.

Sales and price trends in San Antonio mirrored the Texas housing market.

Statewide, 34,363 homes were sold in May, down 1.1% from a year earlier. The median price rose 19.9 percent to $365,800, realtor data shows.

The average 30-year fixed-rate mortgage jumped to 5.78% on Thursday, up more than half a percentage point from 5.23% last week, according to Freddie Mac, the state-sponsored mortgage finance company. That’s almost double the 2.93 percent on the 30-year loan a year ago.

For a $279,040 loan for a San Antonio average-priced home, the borrower will pay $1,633 per month at the current rate. This is $96 per month more than a week earlier and $468 more per month than a year earlier.

“The housing market is incredibly sensitive to interest rates, so when mortgage rates rise sharply, demand drops again,” said Sam Hater, chief economist at Freddie Mac.

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“A significant decline in buying activity, combined with a growing supply of homes for sale, will slow down price growth to more normal levels, which will bring some relief to buyers still interested in buying a home,” Hater said.

The National Association of Realtors did not release sales data for May, but attributed the drop in sales in April to higher prices and mortgage rates.

Existing home sales fell 5.9% in April compared to a year ago, marking the third straight month of decline. Inventories fell to 2.2 months from 2.3 months.

The average price for the same period rose by 14.8% to $391,200. It was the 122nd month of growth from a year ago, the longest streak on record, according to the association.

“Higher home prices and soaring mortgage rates have dampened buying activity,” said Lawrence Yun, chief economist at NAR. “It looks like further declines are expected in the coming months, and we are likely to return to pre-pandemic home sales after a significant spike over the past two years.”

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