Area home sales fall steeply

October total drops 20% from year earlier; slide is the worst since early in pandemic

San Antonio-area home sales in October took their biggest dip since the early days of the coronavirus pandemic, as higher prices and near-record mortgage rates kept buyers on the sidelines.

Single-family home sales fell nearly 20 percent from the same month a year ago, according to new data from the San Antonio Board of Realtors. It was the biggest year-over-year decline since May 2020, when sales fell 20 percent, and the seventh consecutive month of declining sales.

In some ways, the market is returning to norms not seen since the pandemic supercharged sales, giving sellers a strong upper hand as demand and prices soared and the inventory of available homes was depleted.

Now, homes are sitting on the market longer and the supply of available properties is expanding — but prices are still continuing to increase. Along with mortgage rates bouncing around record highs, higher prices are making it tougher for many buyers to land a deal.

“That is reflected in the latest data, which shows existing home sales slowing across all price points,” said Sam Khater, chief economist at mortgage financing giant Freddie Mac.

In San Antonio, buyers closed on 2,656 new and existing homes in Bexar and surrounding counties in October, Realtors data show. That’s down 19.9 percent from a year ago.

As sales have slowed, houses are staying on the market lon

ger, too. The average time a house was for sale last month was 44 days, up 57 percent from a year earlier. Inventory rose to 3.3 months, up from 1.7 months.

Despite lower demand and higher supply, sale prices are continuing to rise. The median price of a home sold in October reached $323,190, up 8 percent from a year ago.

Higher mortgage rates are making it tougher for buyers, as well. The average rate for the standard 30-year fixed-rate mortgage was 6.58 percent during the week ended Wednesday, Freddie Mac said. That was down from 6.61 percent a week earlier — and record highs hit earlier — but up from 3.1 percent a year ago.

Higher rates are a byproduct of the Federal Reserve’s continuing battle against inflation, which includes raising interest rates. The Fed doesn’t set mortgage rates, but its actions affect the mortgage market. And that’s expected to continue to chill the real estate market as consumers remain uncertain about how high rates will go — and wary of a potential recession.

“In recent weeks, rates have hit above 7 percent, only to drop by almost half a percentage point,” Khater said. “This volatility is making it difficult for potential homebuyers to know when to get into the market.”

It marks a departure from the early days of the pandemic.

San Antonio’s housing market soared for much of 2020 and through 2021, turbocharged by high demand, a tight supply of homes for sale, low interest rates and people seeking more space or a new neighborhood as they shifted to remote work, home schooling and children moving back home.

A record 38,448 homes were sold in San Antonio in 2020. Slightly fewer — 37,332 — were sold in 2021, but that was still up 8 percent from 2019. Through October, Realtors data shows, 31,731 homes have been sold, down 7 percent from the first 10 months of 2021.

The cooling housing market in San Antonio is in keeping with trends statewide and nationwide.

Sales of new and existing homes across Texas slid 21.2 percent in October, compared with the same month a year earlier.

The median sale price jumped 8.1 percent to $340,000, and inventory expanded to 2.9 months from 1.6 months during the same period.

Nationally, sales of existing homes declined 28.4 percent in October and inventory stood at 3.3 months, up from 2.4 months. The median sale price jumped 6.6 percent to $379,100.

“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” said Lawrence Yun, the National Association of Realtors’ chief economist. “The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years.”