Washington [US], April 5: The economic fallout from the war with Iran is driving up the cost of buying a home, even as other housing market trends in many parts of the country favor home shoppers this spring.
Mortgage rates have been rising since the war began, as surging energy prices heighten worries about higher inflation, pushing up the yield on US 10-year Treasury bonds, which lenders use as a guide to pricing home loans.
As recently as the last week of February, the average rate on a 30-year mortgage dropped to just under 6 percent, its lowest level in more than three and a half years. It climbed this week to 6.46 percent, its highest level in nearly seven months.
The conflict is also injecting more uncertainty into the US economic outlook at a time when the job market issputtering.
While rates are still down from a year ago, their recent upward trend has already led to a slowdown in mortgage applications. Further increases threaten to put a damper on home sales during what's traditionally the busiest time of the year for the housing market. "The war in Iran has seriously complicated the spring buying season," said Joel Berner, senior economist at Realtor.com. "I expect that many buyers will be put off by rising rates and mounting economic uncertainty, choosing to bide their time rather than jumping on board for a purchase before rates go up."
Home shoppers who can afford to buy at current mortgage rates this spring are likely to find a more buyer-friendly housing market than this time last year.
That means they'll have more leverage when negotiating with sellers, who in many cases are watching their property go unsold for weeks, potentially making them more willing to lower their initial asking price or offer buyers money for closing costs, repairs or other concessions in order to get a deal done, real estate agents say.
In the Dallas-Fort Worth metro area, lower listing prices and more homes on the market are forcing many sellers to price their home more competitively or consider offering some incentives to land a buyer, said Matthew Crites, an agent with Coldwell Banker Realty.
"It's been a really good buyer's market to kind of start the year off with," he said.
The trends helped give home shopper Anne King a strong hand when she set her sights on a three-bedroom, two-bath ranch-style house in Fort Worth listed at $275,000.
The contract administrator offered $10,000 below the listing price.
She also asked that the seller kick in $5,000 toward closing costs. The seller accepted, and later agreed to throw in another $12,000 for repairs after a home inspection revealed roof damage.
King had hoped mortgage rates would ease further before she bought the home, but decided it made sense to buy sooner, rather than risk having to compete this spring against more homebuyers who could potentially trigger a bidding warsomething she experienced last May when she bought a two-bedroom, two-bath townhouse inArlington, Texas.
Source: Qatar Tribune
