BOONE – Rising interest rates didn’t deter home buyers in January, with local Realtors® marking the new year with continued brisk business.
The first month of the year – with its traditional snow and wintry weather mix – is usually one of the calmest, but not in 2018. Home buyers remained active in the High Country area, with sales within Ashe, Alleghany and Avery counties the best in more than a decade.
There were 136 homes worth $34.61 million sold in January, according to the High County Multiple Listing Service. It records all Realtor® activity in the four-county area.
It was the busiest January since at least 2007, when 112 homes worth $29.26 million were sold. It’s a 32 percent increase from last January (103), and a 19.3 percent increase from January 2016 (114).
It also extended to 35 the number of consecutive months local home sales have surpassed 100.
The average sold price for January – total sales divided by homes sold – was $254,463. That’s just below the average sale price for the entirety of 2017 ($258,422).
The busy buying activity has reduced local inventory to its lowest level in years. There were 1,565 homes for sale in the four-county area as of February 10. There were 2,139 homes on the market at this time two years ago.
Buyers are motivated by the upward trend in interest rates. They have risen every week of 2018 so far, with many analysts predicting continued increases.
In its latest mortgage rate report, released February 8, loan giant Freddie Mac reported the average 30-year fixed rate was 4.32 percent, the highest level since December 2016. It was 3.95 percent January 4.
The average 15-year fixed rate was 3.77 percent, up from 3.38 the first week of 2018.
To put the recent increases in perspective, a $300,000 home purchased the first week of 2018 would have had a monthly payment of about $1,424 and a total mortgage cost of $512,500.
That same home purchased this week would have a monthly payment of $1,488 and total mortgage cost of $525,730. That’s a difference of $64 a month, and $13,230 over 30 years.
“Will higher rates break housing market momentum? It’s too early to tell for sure,” said Freddie Mac in its weekly release. “Initial readings indicate housing markets are sustaining their momentum so far.”
That momentum was reflected in the 2017 sales report by the National Association of Realtors®, which was released in late January. Existing-home sales were up 1.1 percent. It was the best year for sales nationally in 11 years.
“Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said Lawrence Yun, NAR chief economist. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.”