Sales of existing homes in Maine rose 5.9 percent in October, slightly outpacing gains seen nationally, as low interest rates continued to help buyers.
Throughout the state, 1,246 homes were sold in October, up from 1,177 homes sold a year ago. The median sale price rose 3.4 percent to $176,250. The median price indicates that half of the homes were sold for more and half sold for less, according to Maine Listings, a subsidiary of the Maine Association of Realtors.
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The gains in Maine slightly topped the 5.2 percent increase seen nationally last month, according to the National Association of Realtors. The national median sales price rose 12.7 percent to $199,500, the 11th straight month of double-digit annual increases. In the Northeast, sales jumped 11.7 percent and the regional median sales price rose 7.4 percent to $247,300.
“Inventory continues to climb, and prices are appreciating; many sellers are now more comfortable entering the market,” said Bart Stevens, president of the Maine Association of Realtors. “A majority of the distressed properties have left the market, and things appear to be moving back toward a more normal real estate environment.”
Stevens, owner-broker with Century 21 Nason Realty in Winslow, said lenders have capital available for borrowers, and those with steady jobs and good credit scores should take advantage of “historically low interest rates and favorable affordability. Now continues to be a good time to purchase real estate for personal use or investment purposes.”
The slower national rate was attributed to the 16-day partial government shutdown, which pinched home sales last month nationally by creating uncertainty about the economy and slowing loan approvals. Thirteen percent of real-estate agents reported that transactions had been delayed.
“The uncertainty created by the government shutdown and debt ceiling battle in October left Americans more worried about the economy than they have been all year,” said Ellen Haberle, economist at online real estate-broker Redfin. “It is no surprise that many buyers put their home-buying plans on hold that month.”
Mortgage rates have also risen from historic lows, making homes less affordable. The average fixed rate on a 30-year mortgage rose last week to 4.35 percent, a full percentage point above the 3.35 percent reached in early May.
Interest rates began to rise in late May on speculation that the Federal Reserve would slow its bond purchases program by the end of this year. But the Fed surprised markets in September when it held off on scaling back the program. Now many analysts predict it will continue to purchase $85 billion a month until early next year.
The bond purchases have kept long-term interest rates low. Mortgage rates are still low by historical standards.
Jessica Hall may be contacted at 791-6316 or at:
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