Buying a home was once a happy time for families. Homes were plentiful to choose from, and imagining your grandmother’s credenza in the dining room and the Christmas tree in the living room front window made for happy thoughts.
Now, however, looking for a home is a stressful event if you’re just the average potential homeowner. Inventory is low, prices are high, and, of course, now we have to stress even more about the increase in mortgage interest rates.
As of June 23, according to Forbes, the average rate for a 30-year, fixed-rate mortgage was 5.89% and the average rate for a 15-year, fixed-rate mortgage was 5.13%. These numbers are slightly down. However, typically they are going up, forcing buyers to make some serious decisions, especially if they may not qualify for the additional monthly cost of the increased financing rate.
They can come up with more cash and apply for a smaller loan – usually not a good option for marginal buyers. They can lower their criteria for what kind of home they want at a lower price point and hope it exists. Or they can drop out of the market completely with the hope things improve in a year or whenever. Unfortunately, this is an option that is happening more and more as the interest rates and the selling prices keep going up.
New home buyers are getting hit even harder. Buyers who are in contract for new construction but haven’t closed are facing mortgage interest rates that are getting close to doubling since they agreed to purchase the home. In addition, they are also confronting construction that is taking longer than usual due to supply-chain and labor constraints. Some new home buyers also have to make difficult decisions; how long can they hold out while they’re watching mortgage interest rates go up and the construction on their new home crawling along?
Time now for the May Manatee County sales statistics published by the Realtor Association of Sarasota and Manatee.
Single-family homes closed 7.3% less than last May. The median sale price was $550,000, 37.5% higher, and the average sale price was $715,504, 26.1% higher. The median time to contract has not changed at six days but the month’s sup- ply of available properties has changed to 1.2 months availability. The good news is new listings are up 17.2%.
Condo sales were up 6.3% over last year. The median sale price was $369,900, 51.9% higher, and the average sale price was $441,674, 41.5% higher. The median time to contract is six days, the same as single family, and the month’s supply of available properties is one month. The good news for condos is also that new listings are up 15.5%.
A combination of higher interest rates and our normal summer slowdown is resulting in a fewer number of sales and more available properties on the market. However, prices, both average and median, remain very strong, according to the president of the Realtor Association, and are still increasing.
Making the biggest investment of your life has always been a stressful event, but it was also mixed with pleasant thoughts of the future and paint colors. Now, however, for the average buyer who needs to watch their dollars, the pleasant thoughts are gone, and they’re left with the stress. My heart goes out to them.
