By TONY TAGLAVORE, Journal Services
For two-and-a-half years, Shreveport’s Zarthina Leary has been trying to buy a house, anxious to get out of the two-bedroom, two-bath apartment she shares with her daughter and grandchild.
That’s two-and-a-half years of frustration.
Two-and-a-half years of discouragement.
“I make decent money. I’m a nurse. I’ve been a nurse for 20 years. But the interest rates are so high, it’s hard to even get a decent house because I don’t want to pay $3,000 for a mortgage. A $190,000 house, and you’re paying a $3,000 mortgage? And if you do find a house you can afford, it’s broke down. It needs repairs. It’s something that needs to be demolished, because it’s not worth living in.”
Leary is one of many potential Shreveport-Bossier City home buyers who have been forced to stay where they are because of high interest rates. According to Bankrate and Freddie Mac, the average rate on a 30-year mortgage in 2021 was 2.96%. Last year, the average rate rose to 6.8%. Matt Walker, Vice President of Snap Mortgage in Bossier City, saw rates in 2023 as high as in the seven’s on government mortgages, and in the eight’s on standard conventional mortgages.
But 2024 may be the year Leary and others can afford to buy.
“I think we will see some (rates) steady holding in the five’s this year,” Walker said. “Personally, I’ve already seen some five’s for some buyers—some mid to high five’s—so they’re already out there for well-qualified buyers. I expect that trend to continue as the year progresses.”
Walker’s prediction is shared by 22 year real estate agent Andy Osborn of Osborn Hays Real Estate.
“I’m really optimistic about home buying and selling. We saw it in December, when the interest rates ticked down some. We saw new buyers enter the market. With the prediction to have three or four more interest rate cuts in 2024, I think that’s going to continue to add more buyers to the market.”
Typically, springtime is when the real estate market picks up steam. Warm weather stimulates buyers to buy and sellers to sell. But Osborn is already seeing signs that people are getting restless.
“I think we’re already starting to see the competitive season start. In January, I typically start to see buyers enter the market. I’ve already had calls from sellers who just wanted to get through the holidays and want to get through January, then get their house on the market. I think you’re going to see a very competitive market starting (this month). I don’t know what interest rates are going to do, but assuming they trend down with it being an election year, the real estate market is going to get back to being competitive.”
Both Osborn and Walker said it’s important to remember that while rates may seem high, they are not historically high.
“A lot of buyers really got scared when we started seeing mortgage rates in the seven’s and eight’s,” Walker said. “A lot of the home buying population now has never seen those rates. I’m in my 30’s, and people of my generation may have heard about our parents and grandparents buying houses at seven to eight percent, but we’ve never really seen that before. I think that was kind of a shocker to those that were contemplating buying.”
Leary says every now and then, she checks the current interest rate. A slight change can mean a more than slight increase or decrease in her monthly payment.
“The difference in a seven percent rate and a five percent rate is over $300 a month,” Walker said. “That plays a significant factor in qualifying a buyer. That could be a huge difference in whether they approve for a certain price point or not. Sometimes 100 bucks makes a difference. Every little bit that these rates drop, it just broadens the pool of buyers that are going to be able to come back in this market and be able to purchase this year.”
While buyers are focused on interest rates, Osborn suggests not wearing blinkers when running the race to buy a home. Beware of competitors Supply, and Demand.
“If you sit on the sideline and wait until that interest rate drops and you have all these other buyers enter the market, then the price goes right back up, and that’s not necessarily a good thing for a buyer. Yes, the interest rate may be lower, but they may have had to pay 10-15 percent more for the house as well. It’s kind of a give and take you have to look at to decide what you want to do.”
As for Leary, she has her fingers crossed this will be the year she moves out of that apartment and into a home.
“I am more hopeful…I don’t want to keep paying rent on something that I could pay and own.”