With all the news of the massive market changes, you might be wondering how this affects you as a buyer.
We need to first look at what the current market is showing us through September 2018.
Our trend for a strong seller’s market continues, with closed sales reported through September. Though we have seen a significant number of price reductions since the middle of August, the market statistics remain strong.
Overall, in Belgrade and Bozeman, residential sales have experienced a 17% dip in average days on the market and more than 10% increase in sales price since this time last year. For most of the year, buyers needed to make quick decisions to successfully acquire property. As the summer progressed and inventory and interest rates increased, buyers began to apply price pressure. As a result, we have seen a significant number of price reductions. We will need to wait for the fourth quarter reported sales to see how the market fairs at the end of the year.
If you are wondering how the changes in the housing market affect your purchasing power as a buyer, you can take a look at our overview of the power of the buyer below.
Increases in home value and median sale price, along with the decrease in time spent on the market sounds pretty good as a seller, but might sound a little daunting as a buyer. According to reports from Freddie Mac, a 30 year fixed mortgage has seen an increase in interest rates from 4.71% to 4.9% on the week ending October 11th. We have seen a major increase in the last 3 years from 2.7% to rates reaching into the 5% range. An almost 50% increase in interest rates means the buyer has decreased purchasing power. The housing market is not showing signs of slowing down anytime soon, which means we may no longer have the luxury of waiting. An individual might have previously been approved for a $400,000 fixed rate, 30 year mortgage at a 4% rate, but waited on putting an offer in on a home. That same individual may now have to adjust their home price budget downwards to account for the 25% increase in interest rates from 4% to 5%. Another option would be to increase the down payment. Bottom line – acting now or soon may be a prudent strategy as cost of ownership continues to increase. Send us a note and we can get you in touch with a lender to discuss your options.