Interest rates

Estate agents deal with the impact of rising interest rates in Midland

Mortgage rates are on the rise and Midland Realtors said they are starting to feel the impact.

Of how much? It may depend on which ones you ask.

Forbes reported this month that mortgage rates are “2 percentage points higher than at the start of the year, after recording the biggest quarterly climb in 28 years in the first trimester. Rates for one 30-year fixed rate mortgage have already jumped to 5.7% as of June 30, from 2.98% a year ago, according to Forbes citing Freddie Mac.

positive and negative

Jeaneen Pruitt is a Realtor with the Jeaneen Pruitt @ Pine & Beckett Realtors team. She said in an email to the Reporter-Telegram that the positive impact is “shown in the fact the last few months that 60% of our market has been $200,000 to $400,000 and I think that’s the price where people made the decision to go ahead and buy a home before rates hit 6.5% or higher.

She thinks the negative is the hesitation higher interest rates will create due to “economic uncertainty.” She wrote that there are price points – like $400,000 to $800,000 – that “are generally under contract in a shorter timeframe” that seem to be “slow” in the new interest rate environment.

“Very special properties that truly feel like a staycation and are beautifully updated — like some at Green Tree — are selling out fast,” Pruitt wrote.

Prices are still high

Carroll Nall, vice president of operations for the Permian Basin Board of Realtors, wrote that June was a record month for the median price of a home sold in Midland County ($331,384). This is a 9.4% increase from June 2021. The average price of a home sold was $377,495. The average last June was $351,050.

The PBBOR also reported that homes sold finished behind 2021 figures for the third straight month in June after rising from January to March.

“Time will tell how impacted we really will be by interest rates,” Nall said in an email. “The total number of units sold increased by just over 6% for the same period last year – 1,397 for 2022 (January to June) and 1,316 during the same period for 2021.

Nall added that there are fewer homes on the market right now than there were at this time last year (477 at the end of June compared to 602 at the end of June 2021) and “it may be more influences everything in the buying process. ”

“Realtors are advising their buyers to be very careful about their use of credit in home buying strategies at this time,” Nall wrote.

Less contract housing

Karri Payne, owner and broker at the Agency, wrote that the rate hike is impacting the number of homes under contract. That number, she wrote, was 411 on March 22, 395 on May 24 and 308 this week.

She also noted that the number of homes available on the market rose to 572, up nearly 100 from the PBBOR’s 477 at the end of June.

Carie McNeil of Coldwell Banker Apex wrote that buyers are becoming more selective and asking for more closing costs and repairs. “We’re seeing ads have longer days in the market,” she wrote, which is consistent with PBBOR stats of 30 days in May to 37 days in June.

McNeil also noted that the average price per square foot in Midland was around $161 this month and that those averages per square foot increased to around $220 to $240 in new construction areas like Los Patios in the north. -west of Midland at $191 at Mockingbird Heights at $145 at Lone Star. Trails.