Since home sales started to surge in Spokane and Kootenai counties a few years ago, real estate professionals have pointed to historically low mortgage rates as one of the key reasons for the increased activity.
With mortgage rates rising over the last month to levels not seen in the past couple of years, activity is tapering off, right?
Maybe not, professionals here say.
Industry veterans say it will be a couple of months before any effects from higher mortgage rates are felt, since buyers who are closing on home sales now likely were approved for their loans at lower interest rates, before the recent uptick. Those seeking loans since rates have risen wont be closing on their transactions for another month or two.
Rob Higgins, executive vice president of the Spokane Association of Realtors, says the organizations indicators dont show a slowdown on the residential sales horizon.
The market continues to be tight, and activity is still robust, he says. Theres a lot of talk about Spokane being discovered by potential home buyers who live elsewhere.
As of late last week, rates for 30-year mortgages sat at about 6.375 percent, says Gary Marks, a loan officer at Washington Mutual Bank here. That was down from 6.5 percent earlier this month, but about a percentage point higher than rates had been earlier in the year.
Despite the increase, Marks says, I dont think the rates are high enough to have scared anybody off. Weve been spoiled having rates in the 5 percent range the last couple of years. Rates are still historically low in the 6s.
Marks says the number of people seeking home loans has slowed somewhat in recent weeks, but that has been a typical seasonal slowing, rather than a function of higher mortgage rates. He says a substantial slowdown likely wouldnt occur unless rates rose to the 7 percent level.
At the same time, however, refinance activity has all but gone away, Marks says, because most homeowners already have home loans with rates as low as or lower than current levels. For the most part, he says, homeowners are refinancing as a money-management tool, such as to pay off debt, rather than to cut their house payment.
Higgins says that through October, the number of home sales reported through the Spokane Multiple Listing Service continued to outpace last years record sales, and the inventory of available homes remained relatively low.
Also, as of Nov. 1, the Spokane MLS had 1,680 active listings, down from 1,750 listings a year earlier, though up from earlier this year when only about 1,300 homes were on the market here.
The 1,680 homes on the market earlier this month are the equivalent of less than three months worth of inventory, Higgins says. Typically, four to six months of inventory is on the market at any given time, he says.
Meanwhile, the median home price through the first 10 months of this year was about $148,000, up 16 percent from the year-earlier period.
Through the first 10 months of this year, 6,700 homes worth $1.13 billion sold through the Spokane MLS, up from the record pace of 6,300 homes worth $925 million in the year-earlier period.
If interest rates go up, I dont know if we can sustain record sales, but sales will remain very strong, Higgins says.
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