Wednesday’s interest rate hike, the fourth to fight inflation, is affecting the housing market, even in North Texas.
A DFW realtor said buyers are more cautious and fear they won’t be able to afford to buy.
According to mortgage giant Freddie Mac, the average 30-year mortgage rate exceeded 7% for the first time in two decades.
Michelle Wood and her husband are ready to move back home to Arkansas if they can sell their Denton home.
“I wish we had done it in August because our house probably would have sold by then,” Wood said.
Their three-bedroom, two-bathroom home on White Pigeon Street has been on the market for 27 days.
There have been some interested buyers, including two competing cash offers that have come in under bids, but no deal has yet been finalized.
“Yeah, it surprised me a little bit, but the right buyer is out there,” said Realtor Joan Condy, of Remax DFW Associates in Frisco.
Condy said North Texas’ 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 small number of potential buyers attend open houses.
Sellers and buyers must now contend with rising interest rates, fewer showings and large inventories.
“I think we should get used to interest rates at 7-8%,” Condi said.
Condy said inventory in and around Denton is currently at two months, but he doesn’t expect North Texas to experience six months of inventory, indicating a more balanced housing market for both sellers and buyers.
House prices will fall.
“Croom, which is just north of here, has started to drop,” he said. “Frisco has also continued to lower its rates.”
Some retailers are also reapplying for benefits.
Wood is willing to pay the buyer $3,000, which can go toward closing costs or if the buyer applies to “buy points” to reduce their interest.
“It’s a little expensive. It can be anywhere from $1,000 to $2,000, sometimes depending on the buyer’s credit score and how much they put down,” Condi said of the purchase. “There are some lenders out there that will even buy two points and can get it down to 5%. So in the first year, you can have it at 5.5%, in the second year of your mortgage it can be. 6.5% and then the third year it’s back to what your mortgage was locked in.”
Condi advises potential sellers to seek out an experienced realtor first.
“Don’t commit to $50,000 to $60,000 in improvements before you even call a realtor, because you’re not going to get that money back,” he said.
Be patient, but be ready, – stressed Wood.
“Always keep your house ready for someone to say, ‘I want to come,'” Wood said. “Of course! Come right away. I’m ready for you.” Condi is holding an open house at 1501 White Dove Lane in Denton on Sunday 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.