COLUMBIA, S.C. — Near all-time low interest mortgage rates are driving more buyers into the market for a new home.
The South Carolina Realtors Association announced last week that as the economy continues to recover from the shutdowns implemented to prevent hospitals from being overwhelmed with COVID-19 patients, buyers have returned to the real estate market faster than sellers.
Early during the shutdowns, the Federal Reserve cut the federal funds rate from 1.00 to a range of 0.00-0.25 to stay ahead of the economic disruptions caused by the shutdowns. When the federal funds rate is lowered, the interest rates offered by banks and other financial institutions usually drop as well. Basically, the federal funds rate is kept so low that banks can’t afford not to lend out the money but since more banks want to lend money, the interest rate they offer individuals and companies looking to take out a loan drops. The idea is to keep the economic system that relies on credit functioning.
Statewide, there were 9,760 new listings of homes for sale in May, down from 12,833 in May 2019. Year-to-date new listings are down to 49,429 from 58,368 last year. The inventory of homes for sale is down to 26,012 in May from 31,582 in May 2019. The number of pending sales and closed sales are also down by 13.2% and 12.6%. The month’s supply of housing inventory is down to 3.3 months from four months in May of last year.
As a result more buyers being on the market than sellers, the association’s data indicates that days on market are down from 87 to 81 days, median sales price is up from $217,000 to $230,000, average sales price is up from $259,825 to $280,311, the percentage of list price received has risen from 97.4% to 97.8%, and the housing affordability index has decreased from 112 to 103.
The state trends are also true for the Pee Dee region. The realtors association defines the Pee Dee region to include Florence, Darlington, Marion, Williamsburg, Dillon, Marlboro, and Chesterfield counties.
In the Pee Dee, the number of residential homes sold was down 24.5% from 261 to 197 from May 2019 to May 2020. The median home price increased by 9.8% from $143,000 in May 2019 to $157,000 in May 2020. Also, the average days on the market decreased by 5% from 141 in May 2019 to 134 in May 2020.