When it comes to Pennsylvania's housing market, one thing remained constant this summer: prices and inventory climbed.
Median sales price in the Keystone State rose 6.4% to $319,250 last month compared to $300,000 in August 2024, the Pennsylvania Association of Realtors said this week. The number of homes sold in Pennsylvania in August barely nudged year over year — a 0.5% increase from 11,402 in August 2024 to 11,470, the real estate agents' group said. Meanwhile, the number of properties for sale grew 6.7% year over year in August from 38,875 to 41,497, the group said in its recent market report.
Those figures could mean more homebuying activity is on tap this fall, the group's president, Bill Lublin, suggested.
Pennsylvania's home price and inventory increases come as mortgage rates continue to plunge this year. The average interest rate on a 30-year, fixed home loan began this year at 6.93% and fell to 6.85% at the beginning of the summer.
The Federal Reserve — which plays a meaningful but not connected role in swaying mortgage rates — lowered its rate last week for the first time in nine months. Hours after that move, mortgage rates took another dip to 6.26%. Real estate agents across Pennsylvania are optimistic that the recent Fed cut will drive down mortgage rates, Lublin said.
"When the Federal Reserve adjusts interest rates, it can directly influence mortgage costs. Even small shifts can affect a buyer’s monthly payment, making affordability a key factor in today’s housing decisions," he said.
To be sure, mortgage rates are more closely tied to the bond market, but that market takes note of Fed moves, thus creating a ripple effect for home loans. Still, lowered mortgage rates and more homes to choose from often mean homebuyers — in Pennsylvania and elsewhere — can afford a property that perhaps they didn't see themselves getting.
Pennsylvania has spent years lagging in residential real estate construction, and those delays have led to a statewide housing shortage, according to a March study from the Pew Research Center. Inventory is growing this year, in part, because homebuilders have been busy constructing developments in some of the state's smallest communities. Inventory is important to track within a local housing market because, as economists have noted, having more supply typically helps temper prices.
Thousands of homes are currently on sale in Pennsylvania — including a three-bedroom stone Colonial in Reading for $379,900, a four-bedroom ranch in Erie for $238,000 and a two-bedroom Cape Cod in Wilkes-Barre that comes connected to a gas station for $390,000.
Real estate agents in Bucks County and the capital region of Harrisburg also reported higher inventory in August.