Interest rates up, housing market slows down
LINCOLN, Neb. (KOLN) -Across the Midwest the housing market is starting to slow down. Homes are staying on the market longer than they were during the pandemic.
Local real estate agents said this return to normal will be good for everyone in the market. Increasing interest rates and increased inventory are turning the housing market back towards a more even market, rather than one that favors sellers.
Lincoln real estate agent Megan Ourada said the “cool down” starts at the top.
“In those million-plus price points it’s really starting to even out,” Ourada said. “We see that trickle down. So, over the next, I would guess maybe year, we’ll see that switching and becoming more of an even market.”
The government is increasing interest rates, which is impacting home buying. At the start of 2022, the average mortgagee rate for a 30-year-loan was 3.1% according to NerdWallet. Now that’s nearly doubled to 5.8%.
“People are looking at what they were approved for in even February of this year,” Ourada said. “Compared to now, their buying power has decreased because interest rates have gone up.”
Inventory is seeing a boost. Ourada said right now there are about 800 listings available in Lincoln. In pre-COVID times, the average was about 1,500. At its low point in 2021, it was at 375.
“The inventory levels are increasing, we were not seeing them increase for a very long time,” Ourada said. “If we didn’t have any new listings come on the market, we would sell everything in a month. Which is fast.”
10/11 NOW spoke with several other realtors on Tuesday who confirmed these things. Houses are staying on the market for a little longer, interest rates are up and on the rare occasion, sellers will discount their homes. But they said compared to pre-COVID, it’s still an active market.
Ourada said the average closing price on all property in Lincoln is $260,000.
”A house that was $100,000 purchase price this year, might have been five years ago a $60,000 house. I would expect over the next year or so it would be 105, 110, that normalized increase in equity.
Ourada said this change in market is no reason for buyers or sellers to panic.
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