According to the report you read, January residential home sales in Oakland County slowed 8.8% for closed and pending sales according to RealComp, or 13.4% according to South Re/MAX -eastern Michigan.
The differences, said Jeanette Schneider, president of Troy-based RE/MAX in southeastern Michigan, depend on the day the numbers are counted for each report’s month, as well as the type of homes counted. The Re/MAX report only counts single-family homes, while RealComp includes condos.
Either way, real estate agents and brokers, as well as people looking to buy or sell homes are watching the numbers closely.
RealComp’s January chart shows fewer homes listed, 1,407 last month, from 1,895 a year earlier.
Schneider said baby boomers are hanging on to their homes longer, whether it’s because they like living there, they’ve paid off a mortgage, or they’ve remortgaged and are working to pay that bill.
Prices continue to rise: Re/MAX puts the current median selling price (exact average) in Oakland County at $295,000, up 3.7% from last January, when the median was $284,500. RealComp figures show a 5.7% increase to $280,000 from $265,000 last year. Regionally, RealComp’s January report for the Greater Detroit Metro Area, which typically covers Lapeer, Macomb, Oakland, Washtenaw and Wayne counties, shows a 6.5% increase in the median home price from $233,718 last January to $248,797 this year.
RealComp’s report also shows that home prices have passed the last peak, in 2006. There are 910,000 existing homes on the market, the lowest number since 1999. Re/MAX’s chart shows that homes are on the market two days less than a year ago, up 34 from 36.
Mortgage interest rates are also rising, with some lenders posting just over 4%, which could also influence this slowdown.
“It’s been a long time since we’ve seen a 4% rate,” Schneider said.
Mortgage rates, while still low, have been rising relatively quickly, noted Len Kiefer, deputy chief economist at Freddie Mac, who shared charts from his office on Twitter last week. An act of Congress created Freddie Mac in 1970 to support lenders with mortgage capital, as a way to increase homeownership.
“If you look back, real mortgage rates are the lowest in a generation,” he wrote, adding “if you look forward (implying that current inflation is transitory and all but gone in 5 years), then real mortgage rates are rising rapidly.”
He went on to wonder what real homebuyers think of mortgage rates. As of the end of last week, Freddie Mac’s website listed the prevailing 30-year fixed rate mortgage interest at 3.69%, which does not include the fees associated with the mortgage itself, such as closing costs or points.
Schneider said everyone is watching how to see the Federal Reserve’s next interest rate decision.
“They signaled that a change is coming,” she said. “We saw that today. As rates start to rise, banks and building societies will adjust their rates with the Fed.”
Consumers — home buyers — will pay the price, and that may be why some people are hesitant, especially millennials pursuing their first mortgage, Schneider said. Stricter rules imposed by lenders can also make it harder to get mortgages approved, she said, advising any buyer in the market to be pre-approved so the purchase budget is clear.
The Southfield-based Mortgage Center website showed that same rate as Freddie Mac, 3.875%, while Troy-based Flagstar Bank posted 4.079% on Monday, with some caveats including that borrowers looking to fund 80 Percent of a $240,000 home would also need to have a minimum credit score of 740. Each borrower is treated individually, said Flagstar spokeswoman Susan Bergesen.
Flagstar is the largest bank mortgage originator in Michigan and the sixth largest in the United States, with $25.5 billion in assets and 158 bank branches, most in Michigan, as well as Indiana, Wisconsin, Ohio and California.
Sellers continue to dominate the market, for now, Schneider said, even for homeowners who have fallen on hard times and need to sell. Unlike the recession, they are more likely to unload a home without going through a foreclosure or short sale.
“The market has been, well, you can call it frenetic or crazy, but the good news is that it’s been fun helping people buy their first home or move into their dream home,” said she declared. “People are spending a lot more time at home and thinking, ‘If I spend that much time here, I’m going to buy my dream house. »