So, after the turkey is consumed, the pies are half gone and the dishwasher is running its first load, it’s time to talk turkey. And what’s everyone’s favorite dinner conversation – real estate.
Let’s start with one of the mysteries of the ages, why mortgage rates go up and down. If you think you’re going to get an understandable answer from me, guess again. Some mysteries are never solved.
As of this writing, the average rates are 6.89% for a 30-year, fixed-rate mortgage and 6.26% for a 15-year, fixed-rate mortgage. Adjustable-rate mortgages are 5.52%, not too much better but could put borderline buyers in the range of qualifying. These rates have actually ticked down a little from 7% a few weeks ago in spite of the Federal Reserve upping their rate by 0.75% again.
Nationally, home sales typically go down when rates go up since fewer potential homeowners qualify for a loan. Despite the sharp decline in sales, home prices are rising on a year-over-year basis, in part be- cause supply remains low. Unfortunately, a slower housing demand affects other goods and services. Furniture, appliances, lumber and plumbing sales declined in September due to less demand for those products, slowing down the overall economy.
Not surprising, the future predictions are all over the place. The Mortgage Bank-
ers Association thinks mortgage rates are expected to end 2022 at 4.8% and to decline gradually to 4.6% by 2024. Good news, if you believe it, for buyers who are trying to decide between an adjustable-rate mortgage and a conventional one.
The National Association of Realtors kind of agrees with the above, saying that all in all, the 30-year, fixed-rate mortgage is likely to hit 5.3% by the end of the year, and that 5-year adjustable-rate mortgages will be at 4% by the end of the year.
Finally, a senior economist at Zillow says that competing dynamics suggest that there will be little reason for mortgage rates to decline anytime soon.
As far as pricing is concerned, the National Association of Realtors expects prices to post year-over-year declines starting next year.
Let’s just see what the Manatee County market did for the month of October according to the Realtor Association of Sarasota and Manatee.
Single-family homes closed at 22.5% less than last October. The median price was $549,444, up 29.3% from last year and the average price was $711,358, up 25.8% from last year. Median time to contract was 24 days compared to 6 days last October and the month’s supply of properties was 2.8 months versus 0.8 last year.
Condos closed 22.5% less than last October. The median price was $368,700, up 32.6%, and the average price was $388,103, up 17.4%. Median time to contract was
22 days versus 7 days last year and the month’s supply of properties was 2.3 months compared to 0.6 last year.
The trend of fewer sales and raising inventory is continuing. Some real estate analysts feel the market is leveling off with less of a bounce to higher values. A lot of this as it relates to Florida is impacted by hurricanes, interest rates and inflation. And we’re not alone. Just coming over one of my news feeds is a report that home sales nationally fell for a ninth straight month in October, according to the National Association of Realtors.
I hope this gives you some debatable information to discuss at the Thanksgiving dinner table. Just remember that when it comes to talking turkey, you probably know as much as anyone. Happy Thanksgiving.