Wednesday’s rate hike, the fourth to fight inflation, continues to weigh on the housing market, even in North Texas.
A DFW realtor said buyers are more cautious, fearing they won’t be able to afford to buy.
According to mortgage giant Freddie Mac, the average 30-year mortgage rate has already topped 7% for the first time in two decades.
Michelle Wood and her husband are ready to retire to a home in Arkansas if they can just 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-bath home 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 claimed, but a deal has yet to close.
“Yes, it has surprised me a little, but there is the right buyer,” said realtor Joanna Condi of Remax DFW Associates in Frisco.
Condi 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 did an open house there, I’d have 30 couples,” Condi said.
Few potential buyers show up to open houses these days.
Sellers and buyers now have to contend with rising interest rates, fewer showings and more inventory.
“I think we have to get used to interest rates in the 7-8% range,” Condi said.
Condy said inventory in Denton and the surrounding area currently runs for two months, but he doesn’t expect a six-month inventory in North Texas, which would indicate a balanced housing market for both sellers and buyers.
Housing prices are falling.
“Crum, just north of here, has started to drop prices,” she said. “Frisco has also continued to lower prices.”
Some sellers are also making concessions again.
Wood is willing to give his buyer $3,000, which can be used toward closing costs or if the buyer chooses to apply for a “points buyout” to help lower their interest rate.
“It’s a little expensive. Sometimes it can be anywhere from $1,000 to $2,000 depending on the buyer’s credit score and how much they’re putting down,” Condi said of the foreclosure. “There are some lenders that even do a two-point buyout and can get it down to 5%. So in the first year you might have 5.5%, in the second year of the mortgage it might be 6.5%, and then in the third year it’s back to that , which was your mortgage loan.
Condi advises potential sellers to seek out an experienced realtor first.
“Don’t make $50,000 to $60,000 worth of improvements before you’ve even contacted the realtor because you might not get all that money back,” she said.
Be patient, but be prepared, Wood urged.
“Always have your house ready in case someone says, ‘I’d like to come over,'” Wood said. “Absolutely! Come over. I’m ready for you.” Kondi 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.