Median home prices in Maui County reached a new historic high of nearly $1.18 million in March as inventory continues to fall, driving a decline in sales as buyers contend with rising inflation and mortgage interest rates.

At $1,177,500, the median sales price for a single-family home in March was a 19.5 percent increase over the same time last year, when the median price was at $985,000, according to a Realtors Association of Maui report released Tuesday. It also topped a previous record high of $1,157,500 in January.

Fewer homes were hitting the market, with new listings down from 158 in March 2021 to 114 last month, a 27.8 percent drop. And, fewer buyers were biting, with closed sales falling from 123 in March 2021 to 102 last month, a 17.1 percent decline.

Inventory of homes for sale in March was at 188, a 25.7 percent decrease from the 253 homes for sale in March 2021.

“Nationally, existing home sales recently dropped to a six-month low, falling 7.2 percent as buyers struggled to find a home amid rising prices and historic low inventory,” the report said.

“Builders are working hard to ramp up production — the U.S. Census Bureau reports housing starts are up 22.3 percent compared to a year ago — but higher construction costs and increasing sales prices continue to hamper new home sales, despite high demand for additional supply.”

Maui County’s condominium market offered little relief for homebuyers at a median sales price of $820,000 in March, a 27.6 percent increase over March 2021 when the median price was $642,500, according to the report.

Like the single-family housing market, fewer condos were being listed and sold compared to a year ago.

New listings were down from 196 in March 2021 to 181 last month, a 7.7 percent decline, while closed sales tumbled from 232 in March 2021 to 177 last month, a 23.7 percent decrease.

Condo inventory took an even bigger hit than the single-family housing market, going from 385 units for sale in March 2021 to 153 last month, a decline of 60.3 percent.

Typically in greater supply than single-family homes over the past decade, the number of condos for sale fell below the number of single-family homes for sale in June and has stayed that way since then, the report shows. Inventory for both single-family homes (188) and condos (153) in March was the lowest in a single month since at least 2010, according to the report.

Central Maui remained a busy market for single-family homes with 17 sold in March with a median price of $949,000. A total of 16 homes were sold in Haiku with a median sales price of $1,312,500 and another 16 sold in Kihei with a median price of $1,285,000.

Kihei also continued to be the hottest market for condos, where 68 units sold with a median price of $768,500. The Napili-Kahana-Honokowai area saw the second-most condo sales at 35, with a median price of $655,000. Another 19 condos sold in Wailea-Makena with a median price of $1,575,000, while 18 sold in Kaanapali with a median price of $1,700,000. Wailuku saw 12 units sold with a median price of $427,500.

The rising prices, coupled with inflation, are pushing would-be buyers toward the rental market, which isn’t faring much better, according to the report.

“Across the country, consumers are feeling the bite of inflation and surging mortgage interest rates, which recently hit 4.6 percent in March, according to Freddie Mac, rising 1.4 percent since January and the highest rate in more than three years,” the report said.

“Monthly payments have increased significantly compared to this time last year, and as housing affordability declines, an increasing number of would-be homebuyers are turning to the rental market, only to face similar challenges are rental prices skyrocket and vacancy rates remain at near-record low.”

* Colleen Uechi can be reached at cuechi@mauinews.com.