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Two key housing indicators released this week signal the real estate market is cooling in Maine and nationally despite rising prices driven by a shortage of homes.
Housing starts and building permits both decreased in Maine and nationally in March, according to U.S. Census Bureau data released Wednesday. Federal and state real estate associations said Thursday that existing-home sales in April fell because of low supply of homes for sale.
Housing starts nationally for privately-owned homes were down slightly by less than 1 percent from March to April to 1.7 million, according to the bureau. It did not have data broken down by states.
However, building permits in Maine were down 52 percent from February to 414 permits in March after a sharp increase in January. They also were down 17 percent compared with March 2021, according to U.S. Census Bureau data.
Nationally, building permits were down 3.2 percent to 1.8 million compared to March. Some 92 percent of single-family building permits become a housing start in the first three months after they are authorized, according to the bureau.
“It is a good predictor of actual starts,” Bill Abriatis, residential construction branch chief in the U.S. Census Bureau, said.
Home sales in Maine were down almost 21 percent to 1,143 houses in April compared to a year ago, according to the Maine Association of Realtors data released on Thursday. At the same time, median sales prices rose more than 25 percent to $346,000 compared to April 2021.
Demand for homes remains stronger than the supply, tamping down sales. April was the 10th consecutive month of year-over-year sales declines. Seven of those months also showed declining for-sale inventory, the Maine association said.
Nationally, existing-home sales fell for the third straight month to 5.61 million units in April, down 2.4 percent compared to March, according to National Association of Realtors data released on Thursday. Compared to April 2021, sales were down 5.9 percent.
Higher home prices and sharply higher mortgage rates reduced buyer activity, Lawrence Yun, chief economist for the national association, said.
“It looks like more declines are imminent in the upcoming months and we’ll likely return to the pre-pandemic home sales activity,” he said.