Lawernce Yun, Chief Economist at the National Association of REALTORS® states in his recent post on Linkedin:
Why lower mortgage rates could lead to higher home prices:
While lower mortgage rates help out buyers, the larger force at play in the housing market is supply. A longstanding lack of homes — at least 4 million, according to NAR’s most recent estimate — means the supply of homes can’t keep up with rising demand, pushing prices higher.
“In essence, affordability improves temporarily with lower rates, but the competition for scarce housing stock often offsets those savings, especially in markets with high desirability that are known to have limited supply like New York,” says Maggie Kent, a real estate agent at CORE and sales at Eastlight Condominiums in New York.
Existing home sales were near historic lows for most of the summer, as rising mortgage rates both pushed buyers out of the market and discouraged homeowners from selling, since many are holding onto their lower-rate loans.
Roughly 86% of existing mortgages have rates of 6% or less, making it tough for homeowners to justify moving and taking on a new mortgage with a higher rate.
“If mortgage rates drop below 6%, it’s likely to increase demand for homes, which could push prices higher,” in the next year, says Kent. She says we could see a “modest” median home price increase of 3% or 4%.
The FIRST WEEK OF OCTOBER is the best time to buy a home! Let's see if mortgage rates below 6% will help!
Let's look at August 2024 Data in Loudoun County, VA, Jefferson County, WV, and Frederick County, VA.
The stats below show what is happening in Loudoun County:
Loudoun County, VA
Closed Sales for August 2024 are down ,7% over August 2023 and down 8.6% since July 2024.
The Average Sold Price for August 2024 is 7.9% higher than August 2023 and 2.3% lower than July 2024.
The average days on the market is 15 days which is the same as August 2023 and the same as July 2024.
How does this resonate with you? Home prices are increasing in value over last month and the same time last year. Buyers are still buying but have time to think before purchasing, and there's a little more available inventory than in years past.
Are multiple offers being made? We are seeing 1 or 2 good offers on homes who score a 9 or 10 in terms of maintenance and aesthetics. Sellers should focus on preparing their homes to maximize their return on investment.
Sellers in Loudoun County, overpricing your home and presenting to the market is not a good game plan. Your home needs to be prices right to attract the buyers!
Closed sales for August 2024 have stayed pretty even in the last 3 years.
Jefferson County, WV
The average days on the market is 26 days which is 18.8% less days than August 2023 and 13.3% less days than Jul 2024.
The Average Sold Price for August 2024 is 10.4% higher than August 2023 and up 2.9% since July 2024.
The average days on the market is 24 days which is 20% less days than August 2023 and 7.7% less days than July 2024.
Closed sales for August 2024 have increased since August 2023. Sales look like 2020-2021.
Frederick County, VA
Closed Sales for August 2024 are up 10.1 % over August 2023 and up 10.1% since July 2024.
The Average Sold Price for August 2024 is 1.7% higher than August 2023 and down 1.3% since July 2024.
The average days on the market is 30 days which is 3.2% less days than August 2023 and 30.2% less than July 2024.
Closed sales for August 2024 are about the same as July 2022 & 2023.
In conclusion, there remains a significant number of prospective buyers in Loudoun County, who want to buy. There seems to be an increase in inventory in Loudoun County. Sellers still feel that their homes are worth more and buyers who think the homes are overpriced. I am seeing a lot of buyers needing homes priced from 700-850k. The higher interest rates have decreased buyer's buying power. The biggest Question- Will interest rates drop?
Sellers, ensuring your home is meticulously prepared and poised for sale is crucial. Additionally, pricing your home at fair market value is essential. Two vital steps I always recommend are conducting a pre-inspection of your property and obtaining a comparative market analysis or an appraisal before listing your home for sale.
Buyers, be prepared to present your strongest offer when entering negotiations on a 10 out of 10 home! Also, realize you can ask for contingencies and subsidies on homes that need cosmetic repair. We are not quite in a buyer's market but we are moving that way!
I am also seeing those who are priced out of the Loudoun County Market buying in Jefferson County, WV. & Winchester, VA.
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