Warwick, R.I. – March 19, 2024 – The Rhode Island Association of Realtors reported that February sales of single-family homes experienced the first year-over-year increase in over two years. Despite the 13% uptick in sales from February of last year, which followed a drop in mortgage rates, closing activity remained well below normal.

The annual increase in sales is unlikely to continue in the coming months, given a 13.4% drop in pending sales, or those contracts initiated but not closed before February 29^th. Along with last month’s increased sales, came a 4.9% decrease in the number of listings on the market compared to 12 months earlier. At the current pace of sales, a 1.3-month supply of homes for sale remains on the market, a clear indication of a strong sellers’ market and a slight decrease from January’s 1.4-month supply.

The inventory shortage continues to keep prices high. The median price of single-family homes last month was $440,000, a 14.6% increase from February 2023.

Condominium sales also rose from 12 months prior, rising 38.9%. An increase in pending sales of 4.5% indicates that sales activity may stay positive for at least one to two more months. While the number of listings rose 13 percent, the strong sales activity reduced inventory in the condominium market to less than one month, a critically low supply.

“First-time homebuyers are turning to condominiums to achieve home ownership after being priced out of the single-family home market. The median price of a condo last month was $112,000 less than that of a single-family home. With that differential, plus the recent drop in interest rates, some buyers were able to begin reaping the benefits of home ownership and start building equity,” commented Sally Hersey, president of the Rhode Island Association of Realtors.

With a median price of $328,000, data from the Association showed an annual increase in the median price of condominiums sold in February of 6.5%.

The popularity of rental investments and multigenerational housing led to a 7% increase in sales and a 15.6% hike in median price among multifamily home sales. Though the supply of properties in the category is higher than that of single-family homes and condominiums, competition remains fierce as the pool of investor buyers are often well financed. The median price of multifamily homes in February was $520,000.

“Seeing more buyers able to secure housing is fantastic but the critical issue remains – we desperately need more housing stock. The Rhode Island Association of Realtors is committed to working with our state’s leaders and housing advocates to increase supply. We encourage all Rhode Islanders to reach out to their senators and representatives to support legislation that reduces barriers to development,” said Hersey.