Sales remain strong as interest rates increase
May 25, 2018, 9:12am
The Boone area real estate market continued its strong sales pace in April, as monthly sales hit a 12-year high for the sixth consecutive month.
The activity came as interest rates continued to rise.
In April, local Realtors sold 185 homes for a combined $49.48 million, according to the High Country Multiple Listing Service. That was a 38 percent increase in sales compared to April 2017 (133).
The sales activity continued a trend from November, in which every month of sales has been the highest since at least 2006. That’s according to the MLS, which records all Realtor activity in Alleghany, Ashe, Avery and Watauga counties dating back to June 2005.
The busiest April in that span had been 2007, when 149 homes were sold.
So far this year, Realtors have sold 629 homes for $163.14 million. The average sale price was $259,356.
In the first five months of 2017, Realtors sold 530 homes for $132.46 million. The average sale price was $249,932.
The average sale price last month was $267,481.
The recent activity has been bolstered by new sellers entering the market. As of May 24 there were 1,878 active listings within the MLS. That’s an increase of more than 230 since early April.
As business remains brisk, interest rates have trended upward. On May 24, loan giant Freddie Mac reported the average fixed rate for a 30-year mortgage was 4.66 percent, the highest level since May 5, 2011. It was 4.61 percent a week prior and 3.95 percent a year ago.
The average 15-year fixed rate mortgage was 4.08 percent.
“Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season,” said Freddie Mac, in its weekly press release. “While this year’s higher mortgage rates have not caused much of a ripple in the strong demand levels for buying a home seen in most markets, inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”
To put the increase in perspective, at the start of 2018 the average 30-year rate was 3.95 percent. A $200,000 home purchased at that time would have had an estimated monthly payment of $949, with a total loan amount of $341,667.
That same home purchased this week would have a monthly payment of $1,032 (an increase of $83), and a total loan amount of $371,690 (an increase of $30,023).