According to a maxim, there are three words important in real estate: location, location, location.

To that, one might add a new byword, or “buy word”: affordability, affordability, affordability.

Lehigh Valley house sales dropped 32.6 percent in July.

Blame it on, yes, you guessed it: affordability.

“Data showed affordability constraints have continued to limit home buying activity this summer,” states the Greater Lehigh Valley Realtors® (GLVR) in its July report.

Said GLVR CEO Justin Porembo in the report, released Aug. 14: “Mortgage rates have approached 7 percent in recent months, leading many prospective buyers to put their home purchase plans temporarily on hold.

“But higher rates have also kept many existing homeowners from listing their homes for fear of giving up the low-rate mortgages they locked in a few years ago, when rates were significantly lower,” Porembo added.

Meanwhile, with insufficient inventory, the Median Sales Price in the Lehigh Valley increased 8.5 percent to $325,500, according to the GLVR.

Homes sold, on average, in approximately half a month, states the GLVR report.

The mortgage rates story hasn’t gotten better. Subsequent to the GLVR Aug. 14 report, the average rate inched above 7 percent.

Mortgage buyer Freddie Mac stated Aug. 17 that the average rate on a 30-year home loan rose to 7.09 percent from 6.96 percent. A year ago, the rate averaged 5.13 percent.

It’s the fourth weekly increase in a row and the highest rate since early April 2002, when it averaged 7.13 percent.

The average rate on a 30-year mortgage is more than double what it was two years ago, when it was 2.86 percent.

The average rate on a 15-year fixed-rate mortgages increased to 6.46 percent from 6.34 percent. A year ago, it averaged 4.55 percent, according to Freddie Mac.

Lehigh Valley Realtors hope that help is on the way.

“Despite a drop in home sales, home prices have remained near record highs, with a Lehigh Valley median sales price of $325,500, 2.4 percent below the all-time high of $333,500 recorded in June 2023,” said GLVR President Howard Schaeffer.

“With only 1.1 months’ supply heading into August, the lack of inventory has boosted competition among buyers and put upward pressure on sales prices, especially in more affordable markets like the Lehigh Valley, where competition for homes remains particularly strong,” Schaeffer said in the GLVR July report released Aug. 14.

“Local Realtors are hyper-aware of the issues facing home buyers and sellers, and are working to find actionable solutions. Congresswoman Susan Wild met with members of the Greater Lehigh Valley Realtors Board of Directors and Government Affairs Committee in June to discuss various factors affecting the housing market,” said Schaeffer.

“Realtors members representing buyers and sellers in Lehigh, Northampton, Carbon and Berks counties were all present to share inventory, affordability, and appraisal challenges, and possible fixes Congresswoman Wild could help work on back in Washington, D.C.,” Schaeffer said.

The National Association of Realtors (NAR) concurred with GLVR officials that affordability constraints continue to limit home-buying activity this summer, with existing-home sales falling 3.3 percent month-over-month nationwide as of last measure.

Despite a drop in existing-home sales, home prices have remained near record highs, with a national median sales price of $410,200 as of last measure, 0.9 percent below the all-time high of $413,800 recorded in June 2022, according to NAR.

July statistics

• Average sales price increased 6.1 percent in July to $373,563, up from $352,052 in July 2022. The average year-to-date sales price increased 8.5 percent to $359,220, up from $331,001.

• Median sales price increased 8.5 percent in July to $325,500, up from $300,000 in July 2022. The year-to-date median sales price increased 8.6 percent to $315,000, up from $290,000.

• Percentage of list price received decreased 0.3 percent to 102.2 percent in July, down from 102.5 percent in July 2022. The year-to-date percentage of list price received decreased 1.6 percent to 101.3 percent, down from 102.9 percent.

• Closed sales decreased 32.6 percent to 528 units in July, down from 783 units in July 2022. The year-to-date closed sales decreased 23.6 percent to 3,435 units, down from 4,497 units.

• Pending sales decreased 15.6 percent to 596 units in July, down from 706 units in July 2022. The year-to-date pending sales decreased 19.6 percent, to 3,810, down from 4,738.

• New listings decreased 21.2 percent to 693 units in July, down from 879 units in July 2022. The year-to-date new listings decreased 26.2 percent, to 4,318 units, down from 5,851 units.

• Days on market increased 15.4 percent to 15 days in July, an increase from 13 days in July 2022. The year-to-date days on market increased 37.5 percent, to 22 days, an increase from 16 days.

• Months supply of inventory decreased 15.4 percent to 1.1 months in July, a decrease from 1.3 months in July 2022.

• Inventory decreased 37.1 percent to 589 in July, down from 937 in July 2022.

• Housing affordability index decreased 18.7 percent to 100 in July, down from 123 in July 2022. The year-to-date housing affordability index decreased 18.1 percent to 104, down from 127.

Carbon County

In Carbon County, the Median Sales Price increased to $262,000.

Closed Sales decreased five listings to 58.

Pending Sales decreased to 59.

New Listings decreased to 73.

Inventory decreased to 134 units.

The Months Supply of Inventory decreased to 2.3 months.

Days on Market increased to 26 days, up from 20 days in July 2022.

GLVR Information

The Greater Lehigh Valley Realtors is a not-for-profit trade association representing more than 3,000 Realtors in Carbon, Lehigh and Northampton counties.

The association provides professional development and training resources, competitive market information, legislative advocacy, peer review and mediation processes for members, and a dispute resolution service for consumers.

The association owns and operates the Greater Lehigh Valley Multiple Listing Service (MLS) and the Greater Lehigh Valley Real Estate Academy.

Realtors are distinguished from real estate licensees by subscribing to a strict code of ethics and standards of practice as defined by the National Association of Realtors.

Information: www.GreaterLehighValleyRealtors.com