R.I. median home prices rise though annual appreciation lessens
Warwick, R.I. – December 21, 2023 – Pent-up demand continued to drive prices up in the Ocean State in November according to data recently released by the Rhode Island Association of Realtors and its subsidiary, State-Wide Multiple Listing Service. The median price of single-family homes sold in Rhode Island rose to $431,000 last month, up from $411,450 a year earlier, a 4.8% increase. Rhode Island was ninth on Realtor.com’s list of hottest U.S. markets in November, up from tenth in October.
While the pace of sales continued to drop year-over-year, November saw the smallest decline of the past five months. Closed sales activity fell 13.8% from November 2022 while the number of sales under contract but not completed by November 30th decreased by 14.7%. Earlier this year, the annual decrease in sales reached 52.7% below that of the previous year.
A shortage of inventory and high mortgage rates have been the main factors hampering the housing market. However, the inventory of single-family homes available for sale rose from 1.5 months in November 2022 to 1.9 months last month and recent reports from the Federal Reserve have many economists predicting a decline in interest rates in the coming year. Lawrence Yun, Chief Economist for the National Assciation of Realtors predicts the 30-year fixed mortgage rate will average 6.3 in 2024.
“With mortgage rates falling below seven percent recently, and sales data showing slightly more supply, we’re seeing some optimistic signs for 2024. The housing shortage is our biggest issue to tackle right now but as rates fall, we’re hoping to see more homeowners willing to give up their current low mortgage interest rate and list their home for sale. Potential sellers should also be aware that while we don’t expect to see significant price drops, the amount of year-over-year price appreciation has definitely slowed this year. If they have been thinking of selling, 2024 may be the optimal time,” said Sally Hersey, 2024 president of the Rhode Island Association of Realtors.
In other areas of the market, the median price of condominium sales rose to $357,500 in November, an 8.3% gain from 12 months earlier. While sales fell by 25.2%, pending sales, the best indicator of market activity in the weeks ahead, rose by two percent, a positive sign heading into the New Year. Condominium pending sales activity had not exceeded the prior year since December 2021.
The multifamily home market saw a 23% increase in median price to $492,000 while sales activity fell just 3.9% from November 2022, by far the smallest decrease all year. Pending sales fell 4.4%.
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About the Rhode Island Association of REALTORS®
The Rhode Island Association of REALTORS®, one of the largest trade organizations in Rhode Island with more than 5,000 members in nearly 1,000 offices, has been serving Rhode Islanders since 1948. Advocating for Rhode Island's property owners, the Rhode Island Association of REALTORS® provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system and the right to own real property. Last year, RI Realtors transacted $6.9 billion in residential real estate sales and $7.1 billion in total sales and rentals including commercial transactions.
The Association is one of more than 1,500 boards and associations that comprise the National Association of REALTORS® (NAR). The National Association of Realtors®, “The Voice for Real Estate,” is America's largest trade association, representing over 1.5 million members involved in all aspects of the residential and commercial real estate industries and who subscribe to a strict Code of Ethics.
REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.