Whither the housing market? It seems we’ve been asking that question for several years, since stock market jitters and record-low interest rates began fueling a mortgage refinancing boom and a meteoric rise in home prices. More than three years later and a couple of interest rates points higher, whispers of a market slowdown remain, yet few signs of trouble have emerged. In fact, by most measures, Maine’s housing market remained strong for the first half of this year. But, as in any financial market, past performance is no guarantee of future results ˆ— especially after recent reports of Maine’s sluggish economy. Here’s a look at the trends in a handful of key market metrics.
Temperature check | How hot or cold is the housing market? A look at key numbers in Maine’s residential real estate.
Home sales and prices
The residential real estate market continues to thrive in Maine, according to the Maine Real Estate Information System. While the number of homes sold remains relatively steady (with a few dips), prices continue to appreciate.
Interest rates, mortgage activity and foreclosures
A roughly 30% jump in rates for a 30-year mortgage since 2005 may not have hurt home sales, but that increase may be responsible for the slowdown in mortgage refinancing shown in this national data (Maine-specific numbers were not available). Refinancing recently accounted for 34% of all mortgage activity. But in 2003, when rates were closer to 5.5%, refinancing accounted for 80% of all mortgages.
Rising rates also can squeeze homeowners with adjustable rate mortgages, leading to national concern about foreclosures. So far, though, foreclosures have not been a big problem in Maine, where in June there was one foreclosure for every 130,378 households. Compare that to Colorado, where foreclosures accounted for one in every 495 households ˆ— the nation’s highest foreclosure rate.
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