Fall Market Update

Fall Market Update

Published | Written by Caitlin Spence

Increased Inventory and Longer Market Times Give Buyers More Options

Reports from Lake & Company brokers as well as local and national data indicate that there is absolutely a current shift in the market. Interest rates are a clear driver of this change. The latest Northwest MLS shows 6,435 pending sales last month, and about the same volume of closed sales. Both figures were down from the year-ago totals, with pending sales dropping about 39% and closings declining around 35%.

Also commenting on interest rates was the National Association of REALTORS®, which noted the slight dip in mortgage rates this week despite the Federal Reserve approving another 0.75% rate hike for the fourth time this year.

Average Primary Mortgage Rates, U.S. weekly averages as of 11/03/2022

NAR cited Freddie Mac’s 30-year fixed mortgage rate that fell to 6.95%, down from 7.08% the previous week. “It is also promising that this was likely the last rate hike of this magnitude, as indicated by the Fed,” wrote Nadia Evangelou, NAR’s senior economist and director of forecasting.

Evangelou also speculated “a return to the sky-high interest rates of the 1980s isn’t likely in today’s economy” and drew comparisons to payments now with those of 40 years ago in today’s money. “If mortgage rates were currently 9% the monthly mortgage payment would be comparable to 1982 rates. Thus, in real values, current buyers pay less for their home purchase than buyers who purchased their home 40 years ago, although home prices are significantly higher now.”

With increased inventory and longer market times, Buyers are seeing more options than they have for many years. Another Buyer friendly shift is the ability to include many of the safeguards Buyers were forced to eliminate before such as inspection and financing contingencies. Combine these benefits with creative mortgage options like interest rate buy-downs or adjustable-rate mortgages, previously frustrated Buyers are seeing an opportunity to find their next home without the stiff competition.

Some Sellers fearful of further interest rate hikes and increased Spring competition are seeing this moment as the time to sell. Sellers must pay close attention to price and condition when presenting the home to the market. What took place on your street six months ago is no longer applicable. Education is important for Buyers also. Your Broker should provide insight about the market conditions in the specific area you are looking, as well as financing options available. While the theme is a Buyer friendly market, there are still some homes that receive multiple offers due to their style, location, or special features.

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