30-Year Fixed-Rate Mortgage Rate Nears Two-Year Low

Freddie Mac reported the 30-year fixed-rate mortgage rate during the first week in June fell to 3.82 percent, the sixth consecutive weekly decline and its lowest level since September 2017. This is encouraging news for buyers heading into summer. A year ago, the 30-year rates averaged 4.54 percent.

“While the drop in mortgage rates is a good opportunity for consumers to save on their mortgage payment, our research indicates there can be a wide dispersion among mortgage rate offers,” says Sam Khater, Freddie Mac’s chief economist, who encourages buyers to shop around for the best mortgage.

Locally, Kalama Kim, Realtor and principal broker at Coldwell Banker Pacific Properties says the decline in rates is significant.

“Reduced interest rates have reinvigorated demand in the market. Closed sales experienced a mini resurgence caused by the excitement of low interest rates, which creates strong momentum moving into the summer months.”

And while Kim says mortgage interest rates are impacting the residential housing market on Oahu most, a bumper crop of listings continues to give buyers more homes from which to choose.

Statistics recently reported by the Honolulu Board of Realtors® confirm that months of inventory remaining and active listings are up — for both single-family and condominiums — for the 12^th consecutive month.

There were 1,576 single-family homes on the market in May, up 23.3% from the 1,278 homes in May 2018. Available condo inventory was up 18.8% this year — from 1,978 condos on the market in May 2018 to 2,350 last month.

The number of days on the market is also up. The days on the market for a typical single-family home to sell is up to 21, from 14 days this time last year. For condos, the number of days on the market is up to 27 days, from 19 days in May 2018.

Sales of Single-Family Homes and Condos | May 2019

Source: Honolulu Board of REALTORS^®, compiled from MLS data

Condo sales reportedly bumped up 5.1% in May — from 495 in May 2018, to 520 last month, likely influenced by the two-year low in mortgage interest rates. Year-to-date, sales volume of condominiums on Oahu are down 7.7%.

Single-family sales this month dropped 3.6% — from 332 in May 2018, to 320 last month. Year-to-date, single-family closed sales are down 1.9%.

Low mortgage interest rates have re-energized buyers’ resolve to keep shopping. Coupled with plenty of inventory it’s an opportune time for buyers to act.

Median Sales Price of Single-Family Homes and Condos | May 2019

Source: Honolulu Board of REALTORS^®, compiled from MLS data

Prices on Oahu have stabilized.

The median sales price of a single-family home in May dipped 1%, to $770,000 —down slightly from $778,000 a year ago. Since January, MSP for single-family homes has remained stable, with a 0.1% decline overall over the first five months of 2019.

Condo prices were also down slightly — from $430,000 in May 2018 to $417,500 last month. After the first five months of 2019, the year-to-date median price of a condo is off 2.4%.

With inventory up, days on the market up, and prices steady, sellers are competing for the attention of buyers and some sellers are getting frustrated when their homes aren’t selling. Kim says, “If a home isn’t selling, adjusting the staging and photographs can sometimes change that, and can attract new buyers to a property.”

He adds, “Pricing is a delicate balance between maximizing opportunity and pushing away buyers. The slightest mistake could mean the difference between selling and not selling.”

HOT MARKETS!

Even with the slowdown in the market and stabilizing prices, some standout neighborhoods are still selling for 100% or more than asking price.

This month’s hot markets are those neighborhoods where sellers received their asking price or more during the first four months of 2019.