Metropolitan Housing Market Shows Signs of Cooling, No Spikes in Mortgage Rates in Q4 2021, Experts Say | New
Those planning to buy a house in Norman before the end of the year should remain prepared to face bidding wars despite recent signs of slowing market activity, according to local experts.
Last month in Norman, new home listings rose from 290 to 252. The estimated time it takes to sell existing inventory remains at 1.2 months, according to data from Multiple Listing Service, a database for the market. immovable.
After a $ 10 per square foot price hike for a Norman home to $ 132 in May, the price has remained relatively stable this summer, according to local MLS data.
This slight slowdown comes after more than a year of warming real estate markets nationally and locally. This was due to the stimulus payments for relief from COVID-19 and the intervention of the Federal Reserve through the purchase of bonds made up of loans purchased from banks. This has allowed banks to act as an intermediary between the home buyer and the investment industry, according to Marketplace.
This allowed banks to lend more money at lower interest rates, Marketplace reports.
Rob Schaerer, broker and partner at Dillard Group Real Estate, said home appreciation rates are likely to be normalizing. He said stories of bidding wars leading to payment above list price intimidated some buyers, leading to setbacks until the market became more attractive to them.
In April, a house could receive 10 to 15 offers, but in recent weeks it could receive four to five, Schaerer said.
“I know I had a few buyers who just wanted to sit and watch the roller coaster instead of riding it for a little while,” he said.
Schaerer said people with this mindset generally expect the market to return to a more favorable state for buyers. But in and around the Oklahoma City metropolitan area – the 9th most affordable housing market in the United States and one of 14 cities to have grown by 100,000 or more residents in the past decade – there is no it is not certain that this will happen.
“It could, but if we are increasing the population at a faster rate than we can build houses or house it, then there is only one thing that can happen, and that is prices going up. “Schaerer said.
Schaerer expects the attention of potential buyers in the fall months to shift away from the housing market, possibly due to the kids returning to school and schedule changes. That could mean an extended plateau on demand until the end of the year, he said.
Cody Simmons of Sunshine Realty said he has seen the Norman and Noble market slow down recently, but the overall pace is still fast.
“There are still several property offerings,” Simmons said.
Simmons said the biggest hurdle for clients navigating the market today usually involves contingencies or clauses included in the sales contract that must be met in order for a home purchase to move forward.
He said emergency issues often arise with those who have to sell their property before they have a chance to buy another home.
“If you were to sell your house and you had someone who was able to buy right now, versus another potential buyer who had to wait to sell their current property, then you would take this one without eventuality,” he said. Simmons said.
A report from Realtor.com released this week shows that the 2021 home buying season has aligned with the seasonal trends seen before COVID-19. The best time to buy a home is the week of October 3, according to the report.
While bidding up could mean paying above the listed price for a home, buyers could still find value in their purchase thanks to low interest rates. Fannie Mae, a government-sponsored mortgage finance company, and the National Association of Realtors predict that interest rates will stay below 3% until January.
Gil Barteau, executive vice president of First Liberty Bank, said lender activity over the past 18 months was unprecedented.
“We haven’t seen it stop, and over the past three weeks we’ve seen an increase in requests for purchase loans,” Barteau said. “We are as busy as ever. “
Barteau said the rates buyers receive are historically low. He said they are unlikely to increase locally in the coming months, but inflation is the wild card.
The August report on the Consumer Price Index from the Bureau of Labor Statistics shows that the cost of goods and services has increased 5.3% in the past 12 months. The National Association of Realtors expects consumer price growth to average 4.5% in 2021.
If inflation is short-lived, Barteau will not raise rates significantly, but if it is seen as more permanent, theoretically, rates could jump.
When the federal government decides to stop buying $ 40 billion in mortgage-backed securities each month, interest rates are likely to rise, he said.
“They are hinting that it could be early 2022, but they also expressed that it could be late 2022,” Barteau said.