BOONE – October was a great time to be involved in the real estate market. Mortgage rates continued declining, and overall local Realtor® activity remained on pace to increase for the fifth consecutive year.
Since spiking in March, interest rates have been dropping steadily. The average 30-year, fixed-rate was 3.97 percent the week of October 16, the low for the year. In the month since it’s nudged up slightly, to 4.02 percent as of November 16.
The average for a 15-year mortgage was 3.20 percent, down from 3.21 percent.
“Lower rates have fueled more calls requesting rates, closing turnaround time and closing fees,” said Susan Norris with Piedmont Federal in Boone. “Also, we’ve seen an increase in inquiries regarding refinancing from a variable rate to a fixed rate mortgage based on expectations that rates will increase.“
Many analysts are now expecting rates to eventually climb through the next 12 months. According to the Washington Post recently, the Mortgage Bankers Association expects the average rate on a 30-year, fixed rate mortgage to rise to 5.1 percent by the end of 2015.
For now, the rates have been welcome in the High Country.
During October local Realtors® sold 140 homes worth $35.7 million, according to the High Country Multiple Listing Service.
The average sale price – total value divided by units sold – was $255,030, the highest since last October.
Current inventory is at the lowest point since April. There were 2,865 active MLS listings in Ashe, Avery and Watauga counties as of November 15, down from a peak of 3,278 in August.
For the year Realtor® sales have slightly outpaced 2013 sales, with 1,121 listings sold through the first 10 months. That’s an increase of 2 percent over the 1,099 sold in that span last year. Yet total value is down 7 percent, from $283 million to $263 million, and the median sold price is down 1.6 percent, from $190,000 to $187,000.
Those trends are mirrored somewhat in the latest READReport, which records all local land transactions including lots and commercial properties. It finds sales and total value year to date both down around 1 percent compared to 2013, from 2,344 units sold to 2,461, and sales down from $447.03 million to $440.97 million.
Nationally, sales are declining year over year. According to the National Association of Realtors® (NAR), existing-home sales this year are expected to fall to 4.9 million from 5.1 million in 2013. They are forecast to increase to 5.3 million next year and 5.4 million in 2016.
Some of that increase is attributed to pent-up demand. According to a BAR survey released November 3, the share of homes bought by first-time buyers has dropped to the lowest point in almost 20 years. The survey found 33 percent of homes purchased this year were by first-time buyers, the lowest proportion reported since 1987 (30 percent).
The long-term average in the survey is 40 percent.