Home sales drop more than 14% so far in 2023

Chattanooga-area home sales dropped more than 14% in the first seven months of 2023 as higher mortgage rates spurred by the Federal Reserve Board’s tightening limited home purchases for the second consecutive year from the record highs reached in 2021.

More than 5,950 homes were sold from January through July of this year, down from the 6,928 sold in the same period a year earlier, the Greater Chattanooga Association of Realtors reported.

Despite the drop in sales, home prices remained elevated in Chattanooga. The median price of homes sold last month was up again to $325,000. Nationwide, the median sales price for homes sold in July was $410,200, or less than 1% below the all-time high of $413,800 recorded in June 2022, according to the National Association of Realtors.

“Mortgage rates have approached 7% in recent months, leading many prospective buyers to put their home purchase plans temporarily on hold,” the Greater Chattanooga Association of Realtors reported in its July multiple listing service report. “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.

New listings in the Chattanooga region were down 21% from a year ago.

“With only 3.1 months’ supply heading into July, the lack of inventory has boosted competition among buyers and put upward pressure on sales prices, especially in more affordable markets, where competition for homes remains particularly strong,” the real estate association said in its monthly report.