It’s no secret that activity from home buyers and sellers slowed at the end of last year.
For one thing, mortgage interest rates peaked in the fall, when the average 30-year fixed rate topped 7%. Homes became less affordable to buy and the economy slowed, so fewer people entered the housing market in the Philadelphia area and nationally.
Both prices and home sales fell in the final months of 2022, according to a report on the Philadelphia housing market in the fourth quarter that Drexel economist Kevin Gillen released Thursday.
Looking back at the last few months and looking toward the future, here are some takeaways.
Philadelphia home sales were down significantly …
… from records set in 2022. Roughly 4,300 homes on the market sold last quarter. That’s below the city’s quarterly average of more than 4,500 sales.
And it’s a 51% drop from the first quarter of 2022, when the city hit a record of roughly 8,700 sales. Sales last quarter fell further than normal for the time of year.
» READ MORE: Data show the Philly area housing market is slowing down
The average house price citywide fell in Philadelphia …
… for two consecutive quarters for the first time since early 2014. In the fourth quarter of 2022, the average price fell by 0.9%, adjusted for seasonal market shifts and quality of homes. The previous quarter showed a 1.8% drop.
Price dips in the city were modest compared with other parts of the country.
Home prices in Philadelphia are higher than last year …
… but appreciation has been slowing since summer 2021, when prices were 12.1% higher than the year before. The average increase in home values in the city was outpaced by average increases in the metropolitan area