Rising interest rates and increasing home prices combined for the perfect storm in June to slightly slow Louisville area home sales. Up until June Louisville home sales had increased dramatically along with the price of a number of homes. But in June we saw interest rates jump one full percentage point or more causing home buyers to ease up on the home buying gas in the hopes that interest rates drop.
Though the raw data was still strong in June compared to a year ago with the Number of Houses Under Contract up 10.87% and Number of Houses Sold & Closed up 13.98%, the home sale numbers could have been better had interest rates stayed lower. You may remember that with interest rates hovering at about 3.5%, the number of homes closing during the month of May 2013 were up 17.26% over the year before. That’s sales rate most likely could have continued into June had rates remained in the mid 3% range.
Louisville home sales for the first five months of 2013 lead directly to an increase in the Average Selling Price of Louisville homes which was up 8.52 percent over the year before and the Median home sales Price up 9.69 percent over June 2013. Combine the rising prices of some homes and interest rates and you have a high octane formula for a slowdown in home sales.