Chris Beason, president of Ruhl & Ruhl Realtors, added that “more people are willing to reach and buy their forever home, because they feel like this is a once-in-a-lifetime opportunity to borrow at 2.5%.”
That certainly was the case with Skriver, of Iowa City, and her husband in making an offer on a $300,000 to $400,000 house in the Quad-Cities.
“We’re currently paying a mortgage on a house that’s more than $100,000 less that we purchased five years ago,” she said. “And our mortgage payments (for the house in Bettendorf) will be pretty comparable at a much higher price point. Interest rates definitely allowed us to look at a way higher price point than we normally would have.”
As a result, many first-time homebuyers are also entering the market, picking up starter homes at affordable rates, Ruhl said.
“People who couldn’t afford to buy and who were renting now can afford to buy,” she said.
Investors, too, are are snatching up homes from $85,000 to $200,000, Ruhl said.
“It’s like a gold coin in rental property,” she said. “You can buy homes really cheaply here, but our rents are pretty good, if you can cash-flow rental houses. About 20% of our inventory has been converted from what used to be single-family resale homes to rental properties (including buyers holding onto and renting their existing property). … But, it’s a double-edged sword because that’s eating up our inventory.”