National dip in home sales not felt locally, officials say

Jeff Kester: The Ozarks tends to avoid wild high and low swings in home sales.

Dan Holt: Affordability continues to be a driver for the local housing market.

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Recently released housing data pointing to the weakest annual pace in 14 years for U.S. existing home sales isn’t reflected in local numbers, according to the Greater Springfield Board of Realtors.

Home sales nationally fell 3.5% in September from a year prior and 1% from August, reaching a seasonally adjusted annual rate of 3.84 million, said the National Association of Realtors. The pace is the lowest since October 2010, a period in which the housing market was still in recovery from the Great Recession.

However, the picture painted by market statistics from GSBOR in September is brighter. The local agency’s residential data for home listings in Greene, Christian and Webster counties showed 513 total units sold in September, a 2.6% increase from a year prior.

For Jeff Kester, CEO of the GSBOR, the national housing sales numbers tend to get skewed up or down based on the activity in very large urban housing markets such as those in California, Florida and Nevada.

“They just experience these huge, wild swings that fortunately we in the Ozarks miss out on experiencing,” he said. “The slowdown nationally is the culmination of years of ongoing affordability issues.”

Those issues are coupled with an election year slowdown, which he said isn’t unusual.

“The housing market, as long as I’ve been in it, always pauses at least some of its exuberance during an election cycle. It seems to be the uncertainty connected with elections, not necessarily reality,” he said. “There’s still going to be, in this case, a Wednesday, Nov. 6, and people are still going to need to live somewhere. That uncertainty and the negativity that continues to knock us around every day; it’s hard to look past that date. When you couple that with a real estate economy that is suffering from those affordability and supply issues, it just creates a kind of a pause.”

Potential impact
With another Donald Trump presidency on the horizon, his plans to increase tariffs will likely lead to higher prices for imported goods, said David Mitchell, Missouri State University economics professor.

“It might just be a general increase in prices for all goods and services that bleeds into the housing market,” he said of the impact of tariffs on housing.

Mitchell, who also is director of MSU’s Bureau of Economic Research and Center for Economic Education, said he has his eye out for higher interest rates.

“I think the biggest driver of that is the federal deficit,” he said. “It’s just completely out of control.”

Total government spending was $6.75 trillion for fiscal 2024 and total revenue was $4.92 trillion, equating in a $1.83 trillion deficit. That’s an increase of $138 billion from the previous fiscal year, according to the U.S. Department of the Treasury website.

A higher 10-year U.S. Treasury, which is the basis for the home mortgage markets, feeds into higher interest rates, Mitchell said. The yield on the 10-year Treasury jumped to 4.43% on Nov. 6 from 4.29% late on Election Day. Meanwhile, the average 30-year fixed mortgage rate from Freddie Mac grew to 6.72% from 6.54% in late October, according to NAR.

“I’m not convinced we’re going to see mortgage rates drop to 3% to 4% again anytime soon,” he said. “I’m not saying they go to 12%, but it might be they will stay exactly where they are and drift up a little bit over the next several years.”

Dan Holt, operating principal at Keller Williams Greater Springfield, also is skeptical of a significant decline in mortgage rates, which dropped for a while under 4% amid the COVID-19 pandemic.

“What happened is our economy got normalized to sub-4% interest,” he said. “So, we still have a lot of homeowners in our market and other markets who are at 3.5%, 4% interest, and the cost of transferring to another house and taking on a higher interest rate is a substantial impact.”

Affordability factor
Even as the sales pace is slower nationally, home prices continue to rise. NAR’s September figures noted an increase on an annual basis for the 15th consecutive month, as the national median sales price rose to $404,500, a 3% year-over-year increase.

The percentage increase was even larger in the greater Springfield area, according to GSBOR data. September’s median sale price jumped to $275,000, up nearly 6% from the previous year.

“I think as much as anything that our driver in our market right now is an affordability issue,” Holt said, adding previous industry concerns nationally were a housing supply issue. “More homes are coming on the market, but they’re coming on the market at a faster rate than they’re going off the market, which is going to create increased inventory. That could potentially increase our days on market.”

In Greene County, the average days on market for homes in September was 29 days, up from 20 days in September 2023, according to GSBOR data.

“We’re still in what traditionally is defined as a seller market because we’re less than 60 average days on market,” Holt said. “It still goes back to a supply-and-demand issue. As long as we’re still in a seller’s market, prices will continue to appreciate.”

Kester said as home mortgage rates are returning to more historical norms, it’s pricing a lot of first-time buyers out of the market.

However, one Springfield program has assisted dozens of first-time homebuyers through a down payment assistance program. The program of Restore SGF, whose stated mission is to help families achieve dreams of homeownership, offers $9,000 to first-time homeowners whose income is up to 150% of the area’s median income. Buyers are not required to pay the money back if they reside in the home for at least five years, according to past Springfield Business Journal reporting.

The 50th – and potentially final – check was presented last month to a local family for their first home purchase. A total of $450,000 was distributed through the program, which was funded via a grant from the city of Springfield and utilized American Rescue Plan Act dollars, said Brendan Griesemer, Restore SGF executive director.

“We knew there was demand out there for a program like this, but just to have it committed that quickly was even surprising to us,” he said, noting the first $9,000 check was distributed seven months ago.

The grant application to the city estimated Restore SGF would average 15 awards to prospective homeowners per year, Griesemer said.

The down payment program is for buyers who want to purchase a house in one of the five neighborhoods served by Restore SGF: Doling Park East, Fassnight, Grant Beach, Meador Park East and Woodland Heights, according to past reporting.

“Obviously, if additional funding would become available, we could put it right back out into that program and just pick up where we left off. But we don’t have anything identified at this point,” he said, adding Restore SGF is researching additional grant opportunities on the state and federal levels. “We’ve been trying to put all those pieces together, and we think the success that we’ve had with that program, it would look good as a nice grant opportunity.”

As Kester said the greater Springfield area has roughly over two months housing inventory, the seller’s market is projected to continue. So, too, will the higher-priced home market, he said.

“Outside of a major economic or geopolitical event, those prices seem pretty solid,” he said. “In the Springfield area, we’ve got a solid, steady market. The rate of price increases that we saw during and right after the pandemic, that’s probably not going to keep up. But there’s nothing suggesting any price adjustments or decreases.”