Home sales data released today by the Rhode Island Association of Realtors showed some improving trends. Single-family home sales activity in Rhode Island continued an 18-month descent in October, falling 17% year-over-year. Pending sales however - those homes put under contract in October but not closed by the 31st – fell by only 7.1%. An indication of sales activity in the weeks ahead, pending sales have not increased from the prior year since December 2021 and had fallen as much as 40.9% in October, 2022.

The Realtor Association reported that the inventory of homes for sale held steady in October with a two-month supply for the second consecutive month. Though well below the five- to six-month supply that typically marks a market balanced between supply and demand, Rhode Island's inventory of single-family homes has been growing since June.

At $435,000, the median sales price of homes sold in October rose 7.4%.

“Most people are shocked by the amount prices have risen, particularly in the past five years, but it’s simply supply and demand economics. There just aren’t enough properties on the market to meet demand and with homeowners reluctant to sell and lose their low mortgage rates, listings are hard to come by. Thanks to cooling inflation however, rate hikes by the Federal Reserve could finally be coming to an end. That’s critical to help the housing market start moving again,” said Bryant Da Cruz, 2023 President of the Rhode Island Association of Realtors.

Da Cruz further pointed out that current mortgage rates are just below the 50-year historic average so while they seem high compared to the historically low rates of recent years, they are not out of range of the norm. Future rate declines in 2024, which many economists are now predicting, should keep rates below the historic average.

In other areas of the market, sales of multifamily homes dropped by 6.2% from 12 months prior and the median price rose by 10.3% to $482,500. Pending sales fell only 3.7%, an improvement since the beginning of the year when they were down more than 40%. Sales in the multifamily home market have been fueled by investors looking to capitalize on rising rents as well as multigenerational buyers, who now make up 14% of all buyers nationwide.

The condominium sector saw similar trends with a drop in sales of 7.6% and a hike in the median price to $380,000, 18.8% more than 12 months earlier. Pending sales fell by 2.6%.
“When you consider that the median net worth of a homeowner is 40 times that of a renter, it’s clear that owning your own home is a great way to save and build wealth. That’s why it’s so important that we continue to see positive housing trends,” said DaCruz.