By Mike Bodeen · 26 February 2024
7% Mortgage Rates No Help but Good Loans Available in 6% Range
Ultimately, the acid test of where any given real estate market is at currently, may reside in the number displayed on the chart below: “Listings Under Contract.”
This week’s Listings Under Contract chart shows that in week 7 of 2024, our Phoenix Metro communities are at their lowest level since 2008 – 16 years. And most of these listings went under contract before rates jumped back over 7% (see 2.19.2024 Snapshot). In other words, in just weeks, our market turned from a strong 2024 opening to a definitive slowdown as demonstrated by the chart below.
Our slow market is further confirmed by the most recent look at closed listings (2-23-2024) showing 5441 closed sales over the past month, which was even lower than last year’s snail-like slow start (5561) to the year.
What about inventory? Isn’t that higher to help buyers? Yes, sort of. It’s good because it gives our buyers slightly more to choose from and more strength in negotiations, but the difference between this year and last year is small – 16,542 currently to 15,136 one year ago. But hey, it’s a whole lot better than 2 years ago when our active inventory was under 4500 at this time of the year.
BUYERS HAVE OPTIONS!
Not All is grim, however. Buyers have some options which they should look into. Conventional loan rates at the end of the day Friday had dropped to 7.08%. FHA loan rates, however, which allow for a 3.5% down payment are down to 6.64%. VA loans, which allow for no down payment are likewise lower at 6.67%.
Another option is requesting the seller to financially assist you by buying down your rate (concessions) or participating in a 2-1 buydown. Call us to ask more about these and other loans and lenders we can refer to you.