The 30-year fixed-rate mortgage rate dropped to 3.04% last week, down from 3.13% the previous week. As expected, sales have remained strong, and prices high. The slight tick-down in interest rates is a boon to buyers with thin margins or anyone that has yet to refinance from a higher rate mortgage.
Speaking of thin margins, buyers looking at the entry-level homes in Central Oregon need to pay particular attention. There are not enough homes to satisfy current buyer demand, and the problem is exasperated at lower price points. The old saying "A rising tide floats all boats" is at play, but that doesn't mean all boats are sea-worthy! An excellent home inspection is imperative in those scenarios to ensure you know what you are buying.
Average and median prices can be deceiving, especially in our current market conditions. Many lower-priced properties with structural challenges take longer to sell, along with more expensive homes that suit a particular taste. Meanwhile, homes in the sweet spot are selling in days.
La Pine illustrates the change in buying power well: This week in 2018, the 30-year fixed-rate mortgage rate was 4.47%, compared to 3.04% today. The cumulative days a home was listed in 2018 in La Pine was 75; this week, it is zero. Both periods saw six homes close, with only a $5000 difference between the median sale price. In 2018, the median home sold was $367,500 had four bedrooms, three bathrooms, and 1940 square feet. In 2020, the median home sold was $362,450 with three bedrooms, two bathrooms, and 1484 square feet. That is a 23.5% decrease in square footage at the same sale price!