Warwick, RI – April 22, 2019 — Home sales data released today by the Rhode Island Association of Realtors shows favorable trends for spring home buyers as inventory continues to rise and mortgage rates remain low.
With 10 percent more single-family homes available for sale than a year ago, it appears that buyers will have more options this spring. Last month’s data recorded 3,026 listings on the market compared with 2,750 in March of 2018. That number translates to a 3.5-month supply of homes for sale, up from the 2.9-month supply seen in March 2018. While growing, Rhode Island’s supply of single-family homes is still below the 6-month supply that typically indicates a housing market that is balanced between buyers and sellers.
Closing activity increased 2.7 percent last month after falling below 2018 levels for the past three months. Increased inventory aided in keeping single-family price growth moderate. At $265,000, Rhode Island’s median sales price has remained identical to that seen a year earlier for the past two months.
“Last year, home ownership was out of reach for many home buyers as the inventory shortage, rising home prices and increasing mortgage rates created significant barriers. As supply increases and rates stabilize, we are starting to see tempered price appreciation. However, we don’t anticipate a significant drop in prices like those seen a decade ago, as we don’t have the questionable lending practices that we had at that time,” said Dean deTonnancourt, President of the Rhode Island Association of Realtors.
Like the single-family market, the supply of condominiums available for sale also increased, rising 12.6 percent from a year ago. The increase was aided by a 12.7 percent decline in the number of closings compared to the prior year. The median price of condominium sales also increased 13.5 percent from a year earlier to $228,500.
In contrast to other sectors of the market, multifamily home inventory became even more constrained, falling to a 2.6-month supply from a 2.9-month supply in March 2018. Sales fell 5.4 percent while the median price increased by 13.7 percent to $256,000.
“Multifamily properties continue to be a great investment even as single-family homes become more accessible to first-time buyers. Rising rents and low interest rates make rental units a prime target for savvy investors,” said deTonnancourt.
With last month’s Federal Reserve projection of no interest rate hikes in 2019, affordability and attractive financing programs will likely continue to promote a more balanced housing market in all housing sectors.