Real estate sales strong as interest rates decline
February 25, 2019, 5:33am
High Country home sales in the first four weeks of 2019 were strikingly similar to the first four weeks of 2018, even as interest rates trends were going in opposite directions in both periods.
Since peaking at a seven-year high last November, interest rates have steadily fallen through the first few weeks of the new year. That’s a reversal from this time last year, when rates were spiking. Yet in both instances buyers remained engaged in the local housing market, according to sales figures collected by the High Country Association of Realtors.
There were 141 homes sold for $38.24 million in January, as recorded by the High Country Multiple Listing Service. It tracks all Realtor sales in Alleghany, Ashe, Avery and Watauga counties. That activity occurred as interest rates declined by two tenths of a percent.
Exactly one year ago interest rates were rising, increasing almost three tenths of a percent in a four-week span. Yet that January Realtors sold 139 homes worth $34.88 million.
To put the recent sales in perspective, from 2005 to 2017 local Realtors sold during January an average of 81 homes. The peak in that span was 114 sold in January 2016.
The 141 homes sold last month marked the 48th consecutive month more than 100 listings have been sold in the High Country area, and the 11th consecutive month more than 126 have been sold.
The average sold price also increased compared to a year ago. Homes sold for an average of $271,180 last month, an 8 percent increase from the average sold price one year ago ($250,946 in January 2018).
The activity comes after a busy 2018 during which 2,349 homes were sold in the four-county area. Inventory have been impacted by the business. There were 1,396 listings active within the MLS as of February 22, down from an estimated 1,540 one year ago.
January sales occurred as interest rates continued a steady decline since peaking in mid-November. The average 30-year fixed rate was 4.94 percent on November 15, the highest recorded since 2011. It’s fallen more than half a percent since.
Loan giant Freddie Mac reported the average 30-year fixed rate as of February 21 to be 4.35 percent. That’s similar to where it was one year ago, only then it was increasing from the average 3.94 percent recorded at the start of 2018.
The most recent average 15-year fixed-rate was 3.78 percent, down from 3.85 percent a year ago.
“Today’s news from Freddie Mac should give buyers some optimism this spring as mortgage rates remain at one-year lows,” said Danielle Hale, chief economist at Realtor.com. “But this spring won’t be without its challenges. Most markets are continuing to see rising home prices, which means many buyers will have to make some trade-offs in order to close this year.”
The National Association of Realtors (NAR) reported that sales of existing homes in January declined 1.2 percent to a seasonally adjusted annual rate of 4.94 million, the slowest sales rate since November 2015.
“Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low,” said Lawrence Yun, NAR’s chief economist. “Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”
During the past 12 months, national home sales have plunged 8.5 percent from the previous year.