Home sales on the decline in York County as interest rates rise
The York County housing market, long a source of optimism as prices boomed and interest rates remained low, is on the decline.
In April, only 532 homes were sold — a 6% decrease from the same time last year. Realtors blame rising interest rates for the slump, according to Elle Hale, the president of the Realtors Association of York and Adams Counties.
The decline in York County is starting a downward trend, as home sales also dipped by 1% in March.
"As interest rates have risen over 5% and home sale prices continuing to escalate, our concern is housing affordability," Hale said. "If they were looking to buy a $250,000 house at 4% for now, they may have to buy a $200,000 house at 5% to make the payment feasible."
After remaining near 3% for the better part of 2021, interest rates have climbed to 5%. Additionally, York County homes on average have gone up about 8% in sale price from this time last year, Hale said.
Nationwide, purchasing a home is 55% more expensive than a year ago, according to statistics compiled by the National Association of Realtors.
"Housing affordability is an issue because it's going to change buyers," Hale said. "It's going to change our supply and demand issue as well, because right now we have the low supply — as buyers start falling off we'll have a supply, but not the demand."
Despite the ongoing housing shortage, demand for buying a home was much higher at the beginning of the COVID-19 pandemic.
Hale said the lower interest rates and initial pandemic shock led more people to buy homes. That since has trickled off and put the market where it is right now.
Teresa Gregory, the president of Traditions Bank Mortgage, said the slowing of home sales is likely a symptom of the country's response to inflation.
"The Federal Reserve has been very transparent with their intent to increase interest rates throughout the year," Gregory said. "That has a direct correlation to what we're seeing with mortgage rates, for sure."
Though rates have increased, Gregory said Traditions Bank hasn't experienced a shrinking client base seeking loans due to more willing buyers than there are homes for sale.
"We haven't seen an immediate downturn on demand at our bank because of rates, but the longer they remain at these higher levels, I think that will come," Gregory added. "So we're all definitely concerned."
Although impossible to see how interest rates will stack in the coming months, the bigger concern is for first-time home buyers and affordability, as those individuals will be most hurt by increasing rates, she added.
"I think there's potential for them to go down next year," Gregory said. "But personally, if if I had to take a bet on it, I would think that interest rates would kind of remain stable from here on out."
In York County, 1,949 homes were sold during the first four months of 2022, a 1% decrease from this time last year.
Several school districts, including Dallastown and West York, saw significant increases in the number of houses sold in April.
In April, 60 houses sold in the Dallastown School District, compared with the 46 sold the previous year.
West York saw a 22% increase in home sales relative to the same time last year.
Eastern York and York Suburban school districts experienced a decline in home sales during April, reporting decreases of 48% and 39%, respectively.
Housing sales are broken down by school district in RAYAC's report.
"It is the beginning of the spring market, and we are expecting to see more homes potentially," Hale added. "Like right now, things are moving along I would say steadily. No huge increase just yet."
— Reach Tina Locurto at firstname.lastname@example.org or on Twitter at @tina_locurto.