A Matter of Interest

Home sales can rise and falls with the ups and downs of changing interest rates. Over all, rates have been relatively cheap compared to 20 years ago. For the past 5 years or longer, the 30 year fixed rate mortgage has been in the 3% to 4% ranges. The last time it was 5% or higher was in 2010.
In the summer and fall of 2018, rates started rising and the 30 yr FRM. In November of 2018 the rate came very close to the 5% mark. This rise may have had an effect on our local sales. In the last few months of 2018 and the first couple of months on 2019, single-family home sales started to decline from the same time a year earlier. Home sales on the national level also took a hit.
Rates have been coming down lately and have been close to the 4% level. Mortgage applications to purchase a home have since been on the increase and are now higher than a year ago. Also, home sales in the Houston area and on the national level saw an increase in March.
Rates for the rest of the year are not expected to go much higher and the Federal Reserve is not expected to raise their rates either. Based n the Fed’s gauge, the rate of inflation was flat for the month of March and slightly up year over year. If that’s the case and the economy holds up, things should be steady as she goes with no significant drop in sales or home prices. The average and median price of a single-family home were both up in March. Time will tell if that will continue.
Oh and just an FYI for those that don’t remember. The rate for the 30 yr FRM in 1990 was around 10%.