Robert Fightmaster, First National Bank & Trust Co. mortgage lending president discusses what’s still going right in the quickly shifting housing market.
Over the past few months, the U.S. Federal Reserve has been steadily increasing interest rates to combat inflation — with more hikes on the horizon. The low mortgage interest rates home buyers enjoyed for years have increased, and lower rates are expected in 2023 and 2024.
Despite higher borrowing costs, there are some positives to be found within the Oklahoma City metro housing market.
First, we are seeing an increase in the supply of current listings compared to recent months. Buyers who felt they were out of options are enjoying a wider selection of homes for purchase. In Oklahoma City, the number of listings shot up by 19% in June. Newly constructed homes are hitting the market, meaning even more properties are available.
Second, the rise in home value is expected to slow by the end of the year. Valuations increased on average by 16% year over year but are expected to dip to 6% in a few months. For home buyers feeling the crunch of high prices and rising rates, relief is in sight!
Thanks to the influx of people moving to Oklahoma from high-cost states like California, Colorado, Texas and Arizona, builders and developers can expect to construct new housing in the coming years and months. The Biden administration also recently released a plan to help increase housing construction over the next five years, which should also decrease the cost of housing nationwide.
Finally, Oklahoma City continues to rank in the top 20 most affordable large markets. The median sales price for a home in the city is $125,000 less than the national average.
All these positives help contribute to a more balanced market, where buyers have more negotiating power and options than they’ve had the past few years. With the future of the economy uncertain, home buyers can rest assured there’s always a silver lining.