BUSINESS HEADLINES

Low interest rates drive home sales

By Richard Greene | Published Saturday, March 23, 2019

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After a slow January, the Wise County real estate market bounced back in a big way in February.

Seventy homes sold last month in the county after only 31 properties closed in January. The 70 sales were the most since November when 76 homes sold. It was 19 more than February 2018.

“These are great numbers for February; a true sign of the number of people moving to Texas and Wise County,” said Lisa Caraway of Parker Properties. “I think buyers who want to be here know that if they see something that might work they have to commit to it. Many buyers slow down in January and February due to us Texans thinking it is too cold or wet to get out, but not this year.”

The spike in activity comes as interest rates hit their lowest point in 13 months. The average 30-year, fixed-rate mortgage Thursday dropped to 4.28 percent, according to Freddie Mac. It’s the lowest rate since Feb. 1, 2018.

First State Bank Executive Vice President Andrew Rottner said they have noticed an uptick in loan applications in the first quarter.

“The third and fourth quarter saw a noticeable slow down in volume, which is attributable to mortgage rates crossing over the 5 percent mark, government shutdown, trade worries and stock market declines,” Rottner said. “Since that time, 30-year mortgage rates have declined below 4.5 percent and the Fed just yesterday indicated they will take a neutral stance on further rate increases. There are no future rate increases expected in the near future. That lowered the treasury yields overnight even further, which should allow for stabilized and lower mortgage rates for most of 2019. That is a key driver for consumers as it relates to home buying or construction.

“We work with a large number of builders and most all are indicating the same thing; they are all seeing much improved volume of calls, sales and closings. The improvements all started mid January and are continuing on a strong pace into March.”

Caraway agreed the steady interest rates are motivating more people to get into the market.

The number of homes on the market dipped from 289 in January to 277 last month. The 277 is a 30 percent increase from February 2018 when there were only 214 listings.

The months of inventory dropped from 4.1 to 3.9 as a result of the decreased number of listings. The figure represents how long it would take to deplete inventory assuming no new inventory is purchased or put on the market.

“We still have limited inventory for the demand,” Caraway said.

Homes spent a total of 97 days on the market, including 35 days to close.

The average price for the 70 homes sold was $240,000 – the same as February 2018. It was up $8,500 from January’s median price.

Homes between $100,000 and $199,999 made up 31.3 percent of the market. That was the same percent of the market for homes between $200,000 and $299,999. Sales for homes between $300,000 and $399,999 were 17.9 percent.

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