One of the main factors in the U.S. housing market slowdown is due to rising mortgage interest rates. The more expensive it becomes to secure a loan, the less money buyers have left to spend. Do the math; when purchasing a $300,000 home with 20% down, a 1% uptick adds about $143.00 to the buyer’s monthly payment, and nearly $51,500 over the life of a loan.
Current Mortgage Interest Rates:
According to Freddie Mac, a 30 year fixed rate mortgage averaged 4.90% with an average 0.5 point for the week ending October 11, 2018. Rates are now at their highest level since the week of April 14, 2011. A year ago at this time, the 30-year FRM averaged 3.91 percent. The current 15 year fixed rate mortgage is at an average of 4.29% with an average 0.5 point. A year ago at this time, the 15-year FRM averaged 3.21 percent.
The second factor contributing to the slowdown is the uptick in housing inventory. Realtor.com reports 465,000 new nationwide listings in September, up 8% from the year before, the largest annual gain in five years. If demand continues to soften and supply begins to grow (as is projected to happen), we will return to a more neutral market which will favor neither buyers nor sellers. This “more normal” market will be better for real estate in the long term.
Now more than ever, it pays to work with an experienced Realtor! Let's get together and develop a winning strategy!
Acuity Group Real Estate Professionals
564 Dodge Ave Suite A
Elk River MN 55330
OUR SPECIALTIES: Residential & Commercial Seller and Buyer Services, Property Management & Residential Rentals, Association Management, Residential and Commercial Investment Property Specialists, New Construction, Listing & Marketing Specialists, CDPE (Certified Distressed Property Experts), Short Sale Specialists, REO/Bank Owned Sales. Golf course properties, water front properties, acreage & hobby farms, vacant land, condos & townhomes, industrial/manufacturing/retail properties, association maintained properties, senior housing, luxury homes, vacation & secondary housing.
Serving the following Minnesota Counties: Sherburne, Anoka, Wright, Hennepin and portions of Mille Lacs and Isanti Counties
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