With mortgage rates hovering near 7%, is now a good time to buy or sell a home?

While local homes for sale are staying on the market longer than a few months ago, the local real estate market is still tilted toward sellers, a local real estate expert said.

Homes now stay on the market for 30 to 45 days, but real estate agents don’t consider the market to be balanced until that period increases to near six months, said Kristen Weida, executive of the Bloomington Board of Realtors.

Few homes available means a higher number of buyers are looking at the same home, which means higher prices.

“We still just don’t have the inventory which is what’s causing the price to be so high,” Weida said.

Lindsey Clark, who handles sales and marketing for Ellettsville-based Barberry Homes & Realty, agreed.

“I have so many people looking for homes, and they’re just spinning their wheels because they can’t find what they’re looking for,” she said.

One of her clients was looking for a house in the range of $235,000, but recently told her that they had decided to rent instead.

Weida knows that challenge firsthand. She recently sold her home because she wanted to downsize and hoped to buy a condominium in Bloomington.

“I was a ready, willing and able buyer, and I could not find what I wanted,” she said.

Weida is now renting a condo in Ellettsville.

However, data show that tightness in the real estate market might be easing, if ever so slightly.

For the first six months of 2024, the number of homes sold in Indiana was 2% below the same period in 2024, at least in part because of slightly higher interest rates, according to the Indiana Association of Realtors.

In Monroe County, though, the number of sales in June fell 18% year-over-year, to 141, a bigger drop than in Lawrence (-14%), Jackson (-5%), Morgan (+3%) and Greene counties (+40%), though better than the declines recorded in Brown (-27%) and Owen (-41%) counties.

Although the number of homes for sale across Indiana was 4% higher than in the first six months of last year, the median sales price continued to rise, to $273,000 in June, up 7% from a year ago.

In Monroe County, the median sales price in June was $356,000, up 10% from a year earlier.

IAR President Jennifer Parham said, though, the higher median prices reflect, in part, more homes being sold above $350,000. Meanwhile, sales of homes below $350,000 fell by 10% in Indiana from May to June.

“This doesn’t mean there aren’t homes available at all price points,” Parham said. “Nearly 4,000 homes were listed for less than $250,000 in June.”

Weida said while mortgage rates are higher than in the recent past, they remain low by historical standards. Rates were above 7% for much of the 1970s, ‘80s and ‘90s, even spiking above 18% in 1981. However, for almost the entire second decade of the millennium, rates remained below 5%, dropping below 3% between summer 2020 and spring 2021, according to the St. Louis Fed.

In a recent H-T column, a member of the faculty of Indiana University’s Kelley School of Business wrote that the higher interest rates are pushing up monthly mortgages by hundreds of dollars. For example, Butters wrote, the monthly mortgage on a $344,000 home, with a 20% down payment, was $1,800 a month a year ago, when mortgage rates were near 3.5%. Today, that same house, with the same down payment, would cost borrowers an additional $550 per month, simply because mortgage rates have doubled.

However, the state realtors association said recent lower inflation numbers and strong labor market data have “strengthened prospects for easing mortgage rates and a Federal Reserve interest rate cut in September,” which would lower borrowing costs, including mortgage rates.

And local builders are continuing to add to the supply.

Valu-Built Construction recently announced plans to build another 17 homes about 0.75 miles south of Edgewood Schools. Those homes are to start below $300,000.

And Barberry Homes is building homes ranging from 1,600 to 3,000 square feet and from $400,000 to $600,000 just south of Edgewood Primary School.

Clark said she and her husband, Josh, never expected to be building homes in that price range, but the costs of land, infrastructure and building materials keep rising.

Boris Ladwig can be reached at bladwig@heraldt.com.