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Mortgage rates jumped to their highest level in several months, putting the US housing market under renewed pressure, The WSJ reports.
The average rate on the standard 30-year fixed mortgage jumped to 7.1%, according to a survey of lenders that Freddie Mac released Thursday.
Existing home sales dropped 4.3% from February, which was its most significant monthly drop in more than a year, according to the National Association of Realtors.
Mortgage rates started to rise in February, weighing on March sales.
The Baton Rouge area has seen the effects of the nationwide trend. Inventory and the number of days houses stay on the market increased in March for the third straight month, according to the latest report from the Greater Baton Rouge Association of Realtors. New listings decreased 13% and pending sales decreased 21.7%. Closed sales and the percentage of list price received also declined in March, according to the GBRAR.
“I think everybody was anticipating interest rates to go down, and they did not,” says Quita Cutrer, a Realtor with Burns & Co. in Baton Rouge. “At the beginning of the year, they said interest rates would go down four times this year and everyone was anticipating that. As far as I can see, our spring market is late this year.”
Cutrer says some listings have yet to hit the market. She attributes part of the slow start of the year to Easter and the fact that the local school districts had different spring break holidays.
“We usually see some listings going in the market in March and April,” Cutrer says. “They’re just slow to come, but I know myself and other agents have some listings that are going to be coming out.”
The looming uncertainty about the potential changes to the rules governing how real estate agents get paid because of the NAR settlement last month could prompt home buyers and sellers to pause until there is more clarity when the new rules go into effect this summer.
A low supply of homes for sale is also pushing prices higher nationwide, according to NAR. The national median existing-home price rose 4.8% in March from a year earlier to $393,500.
The median sales price for homes in Ascension, East Baton Rouge and Livingston parishes rose 1.9% to $250,000 in March compared to a year ago. In comparing the three parishes, the median sales price for homes was most expensive in Ascension at $295,000 in March. Livingston Parish was the least costly at $252,618.
Inventory climbed 23.1% relative to March 2023 and the number of days houses stay on the market increased 16.9%.
“I think a lot of people who are buying in Ascension are buying for their school system,” Cutrer says. “It’s all supply and demand.”
Cutrer anticipates the market will pick up since it has been established mortgage rates will not be decreasing soon.
“I think you will see people who have pent-up demand and wants,” she says. “I think it’s going to turn around. We’re just slow to take off.”
