March 8, 2018

Home sales in the city of Sioux Falls dropped 7.6 percent in February as inventory continued to tighten.

New listings dropped 2.1 percent, according to the Realtor Association of the Sioux Empire Inc.

The average price of a house sold in the city last month was $239,018, an increase of 10 percent from the previous year.

“The three most prominent national market trends for residential real estate are the ongoing lack of abundant inventory, the steadily upward movement of home prices and year-over-year declines in home sales,” according to an analysis included with the report.

“Sales declines are a natural result of there being fewer homes for sale, but higher prices often indicate higher demand, leading to competitive bidding. Markets are poised for increased supply, so there is hope that more sellers will take advantage of what appears to be a ready and willing buyer base.”

Mortgage rates increased nationally in the past month. According to the Mortgage Bankers Association, the average rate for a 30-year fixed-rate loan with a 20 percent down payment that qualifies for backing by Fannie Mae and Freddie Mac rose to its highest level since January 2014.

“Mortgage rates are on the rise. When this happens, it means that buyers in the lower-priced categories tend to have the dilemma of choosing to pay more for their desired home, paying less to get less, waiting for more listings or saving more money toward a down payment,” the report said. “Upward rate pressure is likely to continue as long as the economy fares well.”