1Q17 Market Watch

How’s that real estate market, you ask?

1Q17 single family units sold were 0.5% higher compared to 1Q16.  This is a clear continuation of the market slowdown we noted previously, but make no mistake, we are still on pace to beat last year’s numbers. Even if it’s just by 0.5%What continues to raise my eyebrow is the interest rate increases over the last 9 months. Consider the graph above that shows the interest rate fluctuation for a 30-year fixed rate mortgage over the last 5 years. If you are considering a home  purchase, think about this:

A July 2016 homebuyer had an average interest rate of 3.41%, an average price of $353K, and a monthly principal and interest (PI) payment of $1,560. Today, the rate is 4.25% and the average price is $370K which means a PI payment of $1,820 per month. Did you catch that? A buyer who waited out the last 9 months is paying an extra $260 per month for the same house today. 

Today’s interest rate of 4.25% is actually a low for the week but most believe the trend upwards will continue.  If you are considering buying, we should build a plan now before the rates move even higher. 

I’m confident in the health of our local market, though the slowdown is real and frankly much needed. Still, there is plenty of opportunity for everyone out there. Whether for a move-up seller, first time buyer, or investor, there is opportunity throughout the Austin metro area. You simply need to look for it with your favorite Realtor at your side. That’s me! 

Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States© [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, April 12, 2017.
 

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