NWALook researched from January 2022 to November 2023.
Mortgage Interest Rates:
- The highest average mortgage rate was recorded in October 2023 at 7.62%.
- The lowest average rate was 3.45% in January 2022 for a 30-year fixed mortgage.
Days on Market (DOM) Analysis:
- DOM the lowest occurred in April and May 2022 and the highest in March 2023.
Closed Home Sales:
- The peak in closed home sales was in August 2022, with an average interest rate of 5.2%.
- The Fewest closed sales were in January 2023, with a 6.36% average interest rate.
- Despite the highest interest rate in October 2023, closed sales were 36% higher than the lowest in January 2022.
Sales Price Trends: - NWALook found that there is no large correlation between interest rates and sales prices.
- Sales prices have steadily increased over the past two years despite rising interest rates.
Interest Rates and Market Impact: - Higher rates may challenge buyers’ financing, potentially lowering demand and prices.
- Lower rates could boost affordability and demand, possibly raising home prices.
In our analysis, NWALook found that in Northwest Arkansas, interest rates may not be the key factor influencing current home sales and Days on the Market (DOM), unlike in other areas of the nation. Northwest Arkansas attracts new residents daily, keeping the inventory low despite the increasing interest rates. Despite ongoing challenges, there’s optimism for 2024, as interest rates are projected to decline slightly, potentially easing the inventory constraints experienced in 2023. This shift is expected to lead to a more balanced market, with benefits for both buyers and sellers in the Northwest Arkansas real estate market.
Sources:
Northwest Arkansas Board of Realtors
https://fred.stlouisfed.org/
