SPRINGFIELD, Mo. (KY3) – A hot housing market is surprising local realtors and loan officers. Homes are selling quickly home as buyers are motivated by low interest rates.
“We’ve always been looking for something a little bigger, with a little more space,” said Amber Hagewood.
Amber Hagewood and her husband Andy had outgrown their starter home and were ready to up-size for their family.
“Then with interest rates being so low and the selling market being really high, so we thought now’s a good time and we did it,” she said.
Rob Bell, 2020 President of the Greater Springfield Board of Realtors, said no one could predict how the pandemic would affect real estate.
“I think that the expectation was the market would be rough and it just didn’t happen that way,” Bell said.
Bell said his office only slowed down for a few weeks during stay-at-home orders, then the housing market picked right back up.
He said home sales from September of 2020 are up by 11% in comparison to September 2019. He said average sale prices are also up by 13.5%, from $184,000 to $209,000.
“Our inventory has been low for a while, even prior to the pandemic, and with interest rates being as low as they are, it’s just a natural effect,” Bell said.
Aaron Jernigan, President of Mortgage Banking with Oakstar Bank in Springfield, said interest rates for home loans are among the lowest in history. Sitting between 2% and 3%, depending on the loan, Jernigan said that creates a best case scenario for buyers.
Jernigan said the reason for low rates is because of COVID-19 and the government providing stimulus opportunities. As the government buys mortgage bonds, the price goes up and the yield, or interest rate, goes down.
Like Bell, Jernigan said there was concern about interest rates when the pandemic hit, but they have stayed low since February.
Bell said low interest rates means high demand and houses are selling fast.
“Especially under the $300,000 mark, if you’re at the right price, it’s gone within a day, if not the next day,” Bell said.
That’s exactly what happened in the Hagewood’s case.
“Our house, we put it on the market, and it sold in a day,” Amber Hagewood said.
The situation put Amber, Andy and their two kids in a temporary home, a camper, for the last two months, waiting for the perfect place to buy.
“It’s a little bit tight, but it’s working,” she said.
They’re in negotiations on a new house now, so the Hagewood’s RV days might be numbered. For other buyers who might be looking to make a move, Amber has advice.
“Really just be patient and check the listings a lot,” she said.
Jernigan said low interest rates have also provided a lot of opportunity for refinancing, saving homeowners tens or hundreds of thousands of dollars, making this a huge year for the real estate market. At the bank, Jernigan said it’s also been a record year.
Jernigan said interest rates are expected to stay low for the next couple of years. However, he said as more people have lost jobs because of the pandemic, there are more restrictions on who can qualify for certain home loans right now, like credit scores.
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