One month later, Sioux Falls home inventory still hasn’t budged
Feb. 7, 2022
The beginning of 2022 brought more of the same for the inventory of homes on the market, which remains at a historic low.
The city had a 1.1-month supply in January, according to the Realtor Association of the Sioux Empire, or half of what it was at the same time in 2021 and identical to what it was in the December report.
Nationally, home sales in 2021 reached their highest level since 2006, the association’s national arm reported, with sales up 8.5 percent “as homebuyers rushed to take advantage of historically low mortgage rates,” its report said.
“Home sales would’ve been even greater were it not for soaring sales prices and a shortage of homes for sale in many markets, forcing a multitude of buyers to temporarily put their home purchase plans on hold.”
In Sioux Falls, closed sales for January totaled 156, down 10 percent year over year.
The average price of a home sold was $317,610, up 15 percent, while the median price climbed 17 percent to $276,500.
“For many buyers, 2022 marks a new opportunity to make their home purchase dreams a reality. But it won’t be without its challenges,” the report said.
“Affordability continues to decline as inflation, soaring sales prices and surging mortgage interest rates reduce purchasing power. The sudden increase in rates and home prices means buyers are paying significantly more per month compared to this time last year, which may cause sales to slow as more buyers become priced out of the market.”
The average 30-year, fixed-rate mortgage ended the month at 3.55 percent, nearly a full point higher than the low of 2.65 percent recorded in January 2020, with residential borrowing costs now the highest they’ve been since March 2020, according to Freddie Mac. As rates continue to rise, home price growth is predicted to increase at a more moderate pace.
“While declining home affordability may temper buyer activity, the chronic lack of supply across most housing market segments appears unlikely to change significantly in the near future,” the report said.
In Sioux Falls, sellers in January received just over 100 percent of original list price, and the average house spent 78 days on the market before selling. That’s five fewer days than the same time last year.
Inventory for new construction is slightly better than existing homes, with a 1.2-month supply for single family and a 1.5-month supply for condominiums.
