BLAIR COUNTY, Pa. (WTAJ) — Local realtors say the prices of homes on the could drop due to a dropping demand in homes.
The decline comes after mortgage rates have increased to about 6%, nearly doubling the rate from last year.
“It’s putting a real squeeze on housing affordability,” said Adam Conrad, owner and broker of Perry Wellington Realty in Hollidaysburg.
The spike has caused home sales to drop. Dorothy Colony of Colony Realty in Hollidaysburg says sales are down over 25% from a year ago.
With less buyers to choose from, Conrad says more room to be flexible with prices is needed, and this is the first time in a while that sellers are being forced to do so.
“If you’re a buyer in the last year or so, you’re probably about worn out not getting your offer accepted,” Conrad said regarding the strong seller’s market in 2021. “Now you have a better shot, but it hasn’t changed so dramatically that buyers can radically change their behavior.”
In Altoona, Coldwell Banker broker Robert Pennington said it’s still a seller’s market, and he doesn’t expect that to change significantly until the fall.
“The higher [the interest rates] go, that will disqualify some people into certain price ranges,” Pennington said.
But Conrad says the interest rates aren’t high enough yet to downplay listing prices.
“Buyers shouldn’t being coming in with lowball offers the first day or two a home is listed on the market,” Conrad said. “You’re going to want to wait a couple of weeks before you start making those lower offers.”
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Colony says that waiting to see if the market sways could be a gamble for the buyer.
She thinks that sellers should act now before interest rates increase more and demand decreases. But she also thinks that buyers should do the same to avoid the high interest payments in the future.
“If the interest rate goes up, they’re going to [be able to] afford less house,” Conrad said. “For example, if they can afford a $200,000 house today, maybe two months from now, they will not be able to afford that home.”
Conrad added that demand for single-story homes is particularly high, saying that both young professionals and retirees are both currently interested in these homes.