Wednesday’s interest rate hike, the fourth issued to fight inflation, continues to affect 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.
The average 30-year mortgage rate has surpassed 7% for the first time in two decades, according to mortgage giant Freddie Mac.
Michele Wood and her husband are ready to retire back home to Arkansas if only they can sell their Denton home.
“I wish we had done it in August because our house might have sold,” Wood said.
Their three-bedroom, two-bathroom home located on White Dove Lane has been on the market for 27 days.
There have been several interested buyers, including two competing cash offers, but no deal has yet been made.
“Yeah, I was a little surprised, but the right buyer was out there,” said realtor Joanne Condi, of Remax DFW Associates in Frisco.
Condi said the red-hot housing market in North Texas is cooling after a strong summer with low interest rates and competition driving up prices.
“In places like Coppell, when I do an open house there, I have 30 couples lined up,” Condi said.
These days, very few prospective buyers show up at open houses.
Sellers and buyers must now contend with rising interest rates, fewer showings and a larger inventory.
“I think we have to get used to interest rates that are around 7-8%,” Condi said.
Condi said inventory in and around Denton currently holds two months, but does not expect North Texas to experience six months of inventory that would signal a balanced housing score for sellers and buyers. .
House prices are falling.
“Krum, which is just to the north, is starting to drop their prices,” he said. “Frisco also continues to lower their prices.”
Other vendors also returned concessions.
Wood is willing to give their buyer $3,000 that can go toward closing costs or if the buyer chooses to apply for ‘point buydowns’ 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,” Condi said of the buydowns. “There are some lenders out there that even do a two-point buydown and it can be down to 5%. So, in the first year, you can do it at 5.5%, the second year of your loan can be 6.5% and then the third year goes back to what your loan is locked in.”
Condi advises potential sellers to find an experienced realtor first.
“Don’t make $50-60,000 of improvements before you call the realtor because you won’t get all the money,” he said.
Be patient but be prepared, urges Wood.
“Keep your house ready at all times when someone says: I want to come over,” says Wood. “Really! Come on over there. I’m ready for you.”
