The real estate market is poised for a super ‘spring selling season’ fueled by increased inventory, more sustainable price appreciation and according to data released by Freddie Mac This Week in Real Estate, interest rates that have dramatically dipped since the start of the year. Below are a few highlights from the third week of March that influence our business:
Mortgage Rates Are In A Free Fall With No End In Sight. According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 4.28 percent. It was 4.31 percent a week ago and 4.45 percent a year ago. “Mortgage rates fell this week and have yet to account for yesterday’s Fed’s announcement,” said Danielle Hale, chief economist for realtor.com. “Looking ahead to next week, we could see rates fall even further based on the decision to hold rates steady combined with guidance that emphasized patience.” The Federal Reserve did not increase its benchmark rate Wednesday and signaled it would not hike rates this year. “These developments almost certainly mean mortgage rates will be moving even lower in the coming days after remaining in a narrow range and hovering around 14-month lows for most of the past couple of months.”
Existing Home Sales Surge 11.8% in February. Existing-home sales rebounded strongly in February, experiencing the largest month-over-month gain since December 2015, according to the National Association of Realtors. Total existing-home sales completed transactions that include single-family homes, townhomes, condominiums, and co-ops, shot up 11.8 percent from January to a seasonally adjusted annual rate of 5.51 million in February. However, sales are down 1.8 percent from a year ago (5.61 million in February 2018). Lawrence Yun, NAR’s chief economist, credited a number of aspects to the jump in February sales. “A powerful combination of lower mortgage rates, more inventory, rising income, and higher consumer confidence is driving the sales rebound.” Existing-home sales in the West rocketed 16.0 percent to an annual rate of 1.16 million in February, 7.9 percent below a year ago. The median price in the West was $379,300, up 3.0 percent from February 2018.
Builder Confidence Holds Steady in March. Builder confidence in the market for newly-built single-family homes held steady at 62 in March, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Builders report the market is stabilizing following the slowdown at the end of 2018, and they anticipate a solid spring home buying season. The HMI component charting sales expectations in the next six months rose three points to 71, the index gauging current sales conditions increased two points to 68, and the component measuring traffic of prospective buyers fell four points to 44. Looking at the three-month moving averages for regional HMI scores, the Northeast posted a five-point gain to 48, the South was up three points to 66 and West increased two points to 69. The Midwest posted a one-point decline to 51.