Wednesday’s interest rate hike, the fourth issued to combat inflation, continues to have an impact on the housing market, even in North Texas.
A DFW broker said buyers are more cautious, fearing they may not be able to afford to buy.
The average 30-year mortgage rate has already surpassed 7% for the first time in two decades, according to mortgage giant Freddie Mac.
Michele Wood and her husband are ready to move back home to Arkansas if only they could sell their house in Denton.
“I wish we had done it in August because our house would probably have been sold by then,” Wood said.
Their three-bedroom, two-bathroom home, located on White Dove Lane, has been on the market for 27 days.
There have been a few interested buyers, including two competing cash offers that have been asked, but still no deal.
“Yeah, it surprised me a little bit, but the right buyer is out there,” said Realtor Joanne Condi, of Remax DFW Associates in Frisco.
Condi said North Texas’ red-hot housing market is cooling after a strong summer with low interest rates and competition pushing up prices.
“In places like Coppell, if I held an open house there, I’d have 30 couples in line,” Condi said.
These days, only a handful of prospective buyers show up for open houses.
Sellers and buyers now have to contend with rising interest rates, fewer showings and a larger inventory.
“I think we have to get used to interest rates being in the 7-8% range,” Condi said.
Condi said inventory in and around Denton is now at two months, but doesn’t expect North Texas to experience six months of inventory, which would indicate a balanced housing market for both sellers and buyers.
House prices are falling.
“Krum, which is just north of here, started to drop their prices,” she said. “Frisco also continued to drop their prices.”
Some sellers are also turning to concessions again.
Wood is willing to give their buyer $3,000 which can go towards closing costs, or if the buyer chooses to apply for ‘point down’ to help lower their interest rate.
“It’s a little expensive. It can sometimes be $1,000-$2,000 depending on the buyer’s credit score and how much they’re putting down,” Condi said of buydowns. “There are some lenders out there that even do a two-point down payment and can get it down to 5%. So, for the first year you might have it at 5.5%, the second year of your mortgage it might be 6.5% and then the third year goes back to what closed your mortgage.”
Condi advises prospective sellers to seek out an experienced realtor first.
“Don’t go making $50-60,000 in improvements before you even call the realtor, because you might not get all that money back,” she said.
Pack your patience but be ready, urged Wood.
Always have your home ready for when someone says, ‘I’d like to come over,'” Wood said. “Absolutely! Just come over. I’m ready for you.” Condi is holding an open house Sunday at 1501 White Dove Lane in Denton from 2 to 4 p.m.
Condi is holding an open house at 1501 White Dove Lane in Denton on Sunday from 2 to 4 p.m.