FEBRUARY 2022 ROCKWALL HOUSING MARKET UPDATE

We will start with interest rates.
Following a month-long rise, mortgage rates have effectively stayed flat. For a 30-year fixed-rate-mortgage, rates are currently at 3.55% with .7% in fees and points. But stories of flat interest rates are likely going away. The big news this week for interest rates came after the Federal Reserve’s January Monetary Policy Meeting where they said a quarter-point hike is likely coming soon. This would be the first rate hike since 2018. Many believe this rate hike will come in March. 

While predictions at the end of last year pointed to a rate hike of 25 basis points every quarter this year, some experts now predict we could have up to seven rate hikes over the course of this year, with each increase adding another 25 basis points to the federal funds rate. If this happens, rates could reach over 5% by the end of the year.

What does this kind of a rate hike look like for buyers?
Well, if you took out a $350,000, 30-year loan at 3.5%, your monthly principal and interest payment would be $1,572. If that interest rate went up to 5.25%, your payment would now be $1,933. That’s a $361 difference.

Here’s an interesting tidbit, history demonstrates that potential homebuyers who are on the fence will often enter the market at the start of rate increase cycles.
So let’s dig into the sales data for January and see how the Rockwall market started the year.
For this local market data, I use numbers from single-family home sales in Rockwall County. These numbers are based on sales data from January.

The average sales price is at $450,601.  That’s a massive 25.7% jump from where it was the year before.
The number of homes for sale is at 187 homes. We are down 30.5% in the number of homes available to buy from last year. In fact, this is the fewest number of homes that has ever been listed for sale in Rockwall county over the last 10 years. That’s how significant our inventory shortage is! Especially when you think how much more housing stock we have from all of the new construction over the last 10 years. This is a sobering number.

Rockwall County had 168 sales in January, a 1.2% increase over last year.

The time it takes for a home to go under contract is up to 36 days. That’s just four days more than this same time last year.
Our months of inventory is at .9 months. That’s an 18.2% decrease from last year..
We listed 163 homes in January which is 22.4% less than the previous year. We are anticipating more listings in the new year compared with this year since there is so much pent-up seller activity. And what I mean by this is the fact that there are always reasons people need to sell and buy. Even when interest rates were sky high in the early 80s, people still bought and sold real estate. For the last almost 2 years, sellers have been sitting on the sidelines, holding out so that they don’t have to be a buyer in this market. Well a lot of sellers are getting antsy because their reason for selling hasn’t changed, but now they’re ready to move on to the next house and capitalize on this market that has brought them a lot of equity. 

Our average sales price per square foot went up from last month and is at $181 per square foot, a 27.5% increase from last year.