(photo by Tim Jaynes, Staff)
New-home sales increased nearly 7 percent last month to the adjusted annual rate of 1.02 million, the highest monthly level on record, the Commerce Department reported Monday.
Existing home sales, rose 4.5 percent in July from the previous month to a rate of 5.33 million units, the National Association of Realtors said in a second report.
"Activity has been extremely good," said Broker Faye Walborg, owner of Century 21 Premiere Realty. "This is a good opportunity for someone to purchase a nicer home, and it's also a good opportunity for a couple starting out to purchase a previously owned home."
In the Midwest, new-home sales in July soared 16 percent to a rate of 203,000, the highest level since December 1993. For existing homes, July's sales jumped 10.2 percent in the Midwest to a rate of 1.19 million. Similar increases were found in other regions.
It's no secret low mortgage rates have been a big contributor in recent home sales. "The average person doesn't feel comfortable with the current economy," Walborg said. "But people do know and realize these mortgage rates won't always stay the same."
In July, the average rate for a 30-year fixed-rate mortgage was 6.49 percent, down from 6.65 in June, and well below 7.13 percent for July a year ago, according to the mortgage company, Freddie Mac. Last week, it moved up to 6.27 percent, after falling to a 32-year low in the prior week.
"We have people who are moving up and purchasing more square footage, while their monthly payments remain the same," said Sue Rogers, broker/partner of First Realty.
Due to the low rates, many homeowners have also been refinancing their homes from an 8 or 9 percent mortgage to a 6.5 percent mortgage rate, Walborg added.
Rogers agreed low mortgage rates are encouraging for the public, but thinks other reasons have contributed to the current activity in the local home market. Factors, such as variation of loan availability and job stability, are among reasons Rogers feels other people are moving into the area.
Sikeston's central location also aids in attracting home buyers, Rogers said. "Sikeston residents may hold jobs elsewhere, but at the same time, they have available a good school system, can get to the interstate quickly and have a solid foundation of churches," she said.
Solid appreciation is another motivator for buyers. "We have seen new home prices appreciate," Walborg said. "They've just soared upward. We haven's seen a big increase of appreciation in home resales. They've remained constant."
Nationwide, the average price of an existing home was $162,800 in July, a 7.3 percent increase from the same month a year ago.
The average price of a new home in July was $215,200, up from $209,300 for the same month a year ago. Both Rogers and Walborg agreed a new home in Sikeston generally does not cost that much.
"The market here is one that hasn't always followed the national trend," Rogers noted. "We have a wonderful market in all price ranges. The cost of an average new home (in Sikeston) is somewhere between $70,000 and $150,000."
Walborg estimated spec houses, homes built by companies and sold individually, in Sikeston sell for about $145,000 to $160,000.
"Sikeston has a lot to offer buyers," Rogers explained. "Residents have a pride in ownership, which helps hold the value of the property and home."
The Associated Press contributed to this article.