Charleston-area home sales remained healthy in June, but they slipped from last year's record-setting pace as prices rose and inventory remained tight.
Residential real estate transactions fell 3.8 percent last month from a year earlier, according to preliminary data Wednesday from the Charleston Trident Association of Realtors. The decline follows a 0.7 percent jump in May's adjusted sales figures.
“We have yet to see the increase in inventory that we really need to balance out our market,” said association president Kimberly Lease. “The market is flush with buyers, but there’s just not enough (housing stock) out there to accommodate the variety of needs."
Lease added, "Well-priced, move-in ready homes are not staying on the market long, and prices continue to climb as well."
She noted a bit of a welcome development, too: Prices are rising at a slower, more sustainable pace.
Last month, 1,927 homes changed hands throughout the region at a median price of $270,000 — up $10,000, or 3.8 percent, from a year ago.
Halfway through the year, 9,355 homes have sold at a median price of $265,000, up 6 percent during the first six months of 2018. Volume is up 0.3 percent for January through June.
The number of homes on the market across the region continues to be low, with 5,369 residential listings as "active" for sale in the Charleston Trident Multiple Listing Service as of June 30. That's down 11.5 percent from the sixth month of last year.
A healthier number of available homes in the region to keep prices in check is about 6,500, according to a previous association president.
While the cost to own a home is on the rise, mortgage rates, up from last year at this time, edged down last week, according to financier Freddie Mac.
The rate on a 30-year mortgage dipped to 4.52 percent while the rate on a 15-year loan slid to 3.99 percent.
After a rapid increase throughout most of the spring, mortgage rates have now declined in five of the past six weeks.
“The run-up in mortgage rates earlier this year represented not just a rise in risk-free borrowing costs, but for investors the mortgage spread also rose back to more normal levels by about 20 basis points,” said Sam Khater,cq Freddie Mac’s chief economist. “What that means for buyers is good news. Mortgage rates may have a little more room to decline over the very short term.”
Khater added, “Although the current economic expansion is in its 10th year, residential single-family real estate was initially slow to recover. Now, backed by the demographic tailwind provided by millennials reaching the peak age to buy their first home, the housing market should have some room to grow going forward.”
With low housing stock and higher demand, housing costs are expected to continue to spiral upward.
Property information service CoreLogic expects home prices nationwide to climb 5.1 percent through next May, contributing to the pinch on first-time buyers.
"The lean supply of homes for sales is leading to higher sales prices and fewer days on market, and the supply-shortage is more acute for entry-level homes," said Frank Nothaft, chief economist at CoreLogic.
"During the first quarter, we found that about 50 percent of all existing homeowners had a mortgage interest rate of 3.75 percent or less," Nothaft said.
Because current interest rates are higher, many homeowners are choosing not to sell and buy a new home that would require a higher debt load, he said.
CoreLogic CEO Frank Martell also said four times as many renters are looking to buy than owners are looking to sell, contributing to the supply-and-demand mismatch and higher prices.
Nationally, home prices jumped 7.1 percent over the past 12 months through May, according to the property information provider.
The local Realtors group also adjusted May's sales figures slightly higher in the region to show 1,825 home transactions at a slightly higher median price of $274,900.