Build them and they will sell.

That’s the latest byword, or “buy word,” for the Lehigh Valley house sales real estate market.

Higher mortgage rates, along with elevated sales prices and a lack of housing inventory, continued to impact market activity during the summer home-buying season.

The Greater Lehigh Valley Realtors (GLVR) in its August report, released Sept. 13, showed the shortage of homes for sale has boosted competition for available properties and is driving sales prices higher, with the Median Sales Price for August ($331,750) just missing the local record set in June ($335,000).

“Economists have been calling on the new-home market to make up for the supply deficits in the real estate market,” said GLVR CEO Justin Porembo. “It is critical to expand supply as much as possible to widen access to home buying. Home prices will be influenced by how much inventory is brought to market. Increased homebuilding will tame price growth, while limited construction will lead to home price appreciation outpacing income growth.”

In addition to needing expansion, and affordability, in the new-home market, higher mortgage rates are also creating a standstill in the local real estate market, according to GLVR President Howard Schaeffer.

“Higher mortgage rates are having a so-called ‘golden handcuff effect,’ discouraging homeowners who locked in low rates a few years ago from selling,” Schaeffer said. “This has created an inventory logjam in the housing market. Eighty-two percent of home buyers say they feel ‘locked in’ by their existing low-rate mortgage, according to a survey from realtor.com.

“While significant movement toward the ultra-low 2 percent or 3 percent averages are not expected over the immediate horizon, the National Association of Realtors forecasts the 30-year fixed-rate mortgage could reach 6.4 percent by the end of the year, followed by 6 percent in 2024,” said Schaeffer.

The average 30-year fixed-rate mortgage has remained above 6.5 percent since May, hitting a two-decade high in August, according to Freddie Mac. Existing-home sales have continued to slow nationwide, dropping 2.2 percent month-over-month as of last measure, with sales down 16.6 percent compared to the same time last year, according to the National Association of Realtors.

Falling home sales have done little to cool home prices, however, which have continued to sit at record high levels nationally thanks to a limited supply of homes for sale.

According to NAR, there were 1.11 million homes for sale heading into August, 14.6 percent fewer homes than the same period last year, for a 3.3 months’ supply at the sales pace. The shortage of homes for sale has boosted competition for available properties and is driving sales prices higher, with NAR reporting a national median existing-home price of $406,700, a 1.9 percent increase from one year earlier.

August statistics

• Average sales price increased 3.6 percent in August to $370,562, up from $357,755 in August 2022. The average year-to-date sales price increased 7.8 percent to $361,030, up from $334,944.

• Median sales price increased 5 percent in August to $331,750, up from $315,9750 in August 2022. The year-to-date median sales price increased 9.6 percent to $319,000, up from $291,075.

• Percentage of list price received increased 1.2 percent to 102.4 percent in August, up from 101.2 percent in August 2022. The year-to-date percentage of list price received decreased 1.2 percent to 101.5 percent, down from 102.7 percent.

• Closed sales decreased 16.6 percent to 644 units in August, down from 772 units in August 2022. The year-to-date closed sales decreased 22 percent to 4,108 units, down from 5,270 units.

• Pending sales decreased 10.7 percent to 649 units in August, down from 727 units in August 2022. The year-to-date pending sales decreased 18.8 percent, to 4,439, down from 5,4,64.

• New listings decreased 12.1 percent to 703 units in August, down from 800 units in August 2022. The year-to-date new listings decreased 24.4 percent, to 5,028 units, down from 6,651 units.

• Days on market stated the same, increasing 0.0 percent at 15 days in August, the same as 15 days in August 2022. The year-to-date days on market increased 31.3 percent, to 21 days, an increase from 16 days.

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

• Inventory decreased 34.8 percent to 588 in August, down from 902 in August 2022.

• Housing affordability index decreased 20.2 percent to 95 in August, down from 119 in August 2022. The year-to-date housing affordability index decreased 23.3 percent to 99, down from 129.

Carbon County

In Carbon County, the Median Sales Price increased to $250,858.

Closed Sales dropped by six listings, coming in at 62.

Pending Sales decreased to 59.

New Listings dropped three listings to 77.

Inventory dropped to 136 units.

Months Supply of Inventory increased to 2.4 months.

Days on Market increased to 34 days up from 26 days in August 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