Consider Arkansas Market Conditions When Shopping for Home and Mortgage

By Richard Barrington
Local Lender Columnist
Jun 12, 2008
With housing prices and mortgage rates down since last summer, this could be a good time for first-time home buyers to shop for a house. Because real estate is a very local business, understanding conditions in Arkansas could help buyers get the best house and mortgage deal possible.

On the surface, housing prices in Arkansas may not appear to have declined, but there may be more to the numbers than meets the eye. Also, knowing a little extra detail about mortgage rates can be useful to anyone entering the real estate market.

Buyers Set the Terms in a Slow Market

Statewide, the median home price in January of 2008 was actually up slightly from the January of 2007 level. The median home price for January, 2008 was $149,091, a 1% increase over a year previously. This may suggest that houses in Arkansas are not selling at discounted prices, but it is worth taking a closer look.

The volume of homes sold in the state declined by 26.6% from January of 2007 to January of 2008. This is indicative of a significant drop-off in demand for housing purchases, a drop-off which also shows up in the fact that homes are now staying on the market longer.

All of this means you are likely to find some anxious sellers when you go home shopping, and anxious sellers are more likely to bend to make a deal. This bargaining may take the form of a discount in price, but one reason why median home prices do not always reflect the true softness of the market is that there are other types of seller concessions as well. Sellers anxious to close a deal can be talked into everything from paying closing costs to throwing in some new appliances.

Watch Out for Mortgage Rate Volatility

The good news on mortgage rates is that they have fallen overall since peaking at around 6.7% last summer. However, there is need for a word of caution about mortgage rates.

Mortgage rates have been very volatile lately, often swinging up or down significantly from one week to the next. This is not surprising given the uncertain economic environment, but it can add an unpredictable element to mortgage shopping. In your conversations with lenders, be sure to ask how long they can lock in an offered rate. You want to make sure the rate you see is the rate you get, and if things have changed by the time you make a deal on a house, be sure to freshen up your lender comparisons to reflect the latest information.

Source:
The Morning News

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.