With mortgage rates still low and employment on the increase, Chattanooga Realtors are enjoying record home sales in 2016.
Halfway through the year, Chattanooga home sales were up 10.6 percent over last year's record pace, according to figures released by the Greater Chattanooga Association of Realtors.
The local gain even beat the national 3 percent increase in home sales over a year ago. The National Association of Realtors said that existing home sales rose for the fourth consecutive month in June, with a growing share of first-time buyers entering the market.
"Our local economy continues to grow, and Chattanooga is now seen as a place people want to live," said Nathan Waldorf, president of the Greater Chattanooga Association of Realtors. "When I graduated from college [in 1998], Chattanooga wasn't a a place where most of my friends were moving to. But now it is different — it's attractive, growing and clean, and people want to live here."
The median price of homes sold in Chattanooga also is up. Last month, the median price of homes sold in Chattanooga by local Realtors was $172,000, up 11 percent from a year earlier.
Despite the price jump, however, home prices in Chattanooga still remained 30 percent below the U.S. median price of $247,700 last month.
Realtors say local prices are likely to continue to move higher as the available supply of homes on the market shrinks from the increase in sales.
The number of homes listed for sale by Chattanooga Realtors last month, 3,703, was down nearly 20 percent from a year earlier. Combined with the brisker pace of sales, the average home sold in Chattanooga last month in 4.6 months, less than half the average time it took to sell a home only two years ago.
That is spurring homebuilders to start more new housing in Chattanooga. Jay Bell, president of Bell Development Co., said he is adding on to nearly all of his subdivisions this year.
"We're breaking ground on a number of new developments," Bell said. "We see a very strong market and we're probably going to be as active this year as we've been in seven or eight years."
Lawrence Yun, chief economist for the National Association of Realtors, said "sustained job growth, as well as this year's descent in mortgage rates, is undoubtedly driving the appetite for home purchases."
Mortgage rates near all-time lows have helped increased demand. Mortgage buyer Freddie Mac said the average 30-year fixed-rate mortgage was 3.45 percent last week, down from 4.05 percent last year.