Wednesday’s interest rate hike, the fourth issued to fight inflation, continues to weigh on the housing market, even in North Texas.
A DFW Realtor said buyers are more cautious, worried they won’t be able to buy.
The average 30-year mortgage rate has already exceeded 7% for the first time in two decades, according to mortgage giant Freddie Mac.
Michele Wood and her husband are willing to move back to their home in Arkansas if they can only sell their house in Denton.
“I wish we had done it in August because our house probably would have sold by then,” said Wood.
Their three-bedroom, two-bathroom home on White Dove Lane has been on the market for 27 days.
There are some interested buyers, including two competing cash offers that have come under question, but no deal has yet been made.
“Yeah, I messed up a little bit, but the right buyer is out there,” said realtor Joanne Condi, of Remax DFW Associates in Frisco.
Condi said the North Texas red-hot housing market is cooling after a strong summer with low-interest rates and competition driving up prices.
“In places like Coppell, if I had an open house there, I’d have 30 couples lined up,” Condi said.
These days, only a few prospective buyers show up for open houses.
Sellers and buyers must now contend with rising interest rates, fewer showings and greater inventory.
“I think we need to keep interest rates at 7-8%,” said Condi.
Condi said inventory in and around Denton is now closed every two months, but he doesn’t anticipate that North Texas will experience a six-month inventory that would reflect a balanced housing index for both sellers and buyers.
House prices are falling.
“Krum, which is north of here, has started to lower its prices,” she said. “Frisco also continued to drop its prices.”
Some retailers are once again turning to concessions.
Wood is willing to pay the buyer $3,000 that can go towards closing costs or if the buyer wants to apply for a ‘point purchase’ to help lower their interest rate.
“It’s a little expensive. It can be $1,000-$2,000 sometimes, depending on the buyer’s credit score and how much they put down,” said Condi of the purchase. “There are some lenders that even do a two-point purchase and can get it 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 will revert to what your mortgage is locked in.”
Condi advises would-be sellers to look for an experienced realtor first.
“Don’t go making $50-$60,000 in advances before you even call the realtor because you might not get all that money back,” she said.
Pack your patience but be prepared, asked Wood.
“Always prepare your house for someone to say: I want to come over,” Wood said. “Of course! Come right. I’m ready for you.”