Market Snapshot | February 2023

Monthly Recap

– Kansas City Association of Realtors

In its continued effort to curb inflation, the Federal Reserve raised its benchmark interest rate in February by a quarter-percentage point to 4.50% – 4.75%, its 8th rate hike since March of last year, when the interest rate was nearly zero. Mortgage interest rates have dipped slightly from their peak last fall, leading pending sales to increase 8.1% month-to-month as of last measure, but affordability constraints continue to limit homebuyer activity overall, with existing-home sales declining for the twelfth consecutive month, according to the National Association of Realtors® (NAR).

Closed Sales decreased 12.8 percent for existing homes and 14.0 percent for new homes. Pending Sales decreased 15.9 percent for existing homes and 40.8 percent for new homes. Inventory increased 5.9 percent for existing homes and 79.8 percent for new homes.

The Median Sales Price was up 2.9 percent to $250,000 for existing homes and 2.2 percent to $510,760 for new homes. Days on Market increased 50.0 percent for existing homes and 35.5 percent for new homes. Supply increased 28.6 percent for existing homes and 109.7 percent for new homes.

With buyer demand down from peak levels, home price growth has continued to slow nationwide, although prices remain up from a year ago. Sellers have been increasingly cutting prices and offering sales incentives in an attempt to attract buyers, who have continued to struggle with affordability challenges this winter. The slight decline in mortgage rates earlier this year convinced some buyers to come off the sidelines, but with rates ticking up again in recent weeks, buyers are once again pulling back, causing sales activity to remain down heading into spring.