We’re in for a very competitive stretch in the real estate market.
First off, mortgage rates have started increasing. For the first time since last summer, the 30-year average mortgage rate is now over 4%. This follows a long period when mortgage rates were near record lows.
This latest increase might be more than just a temporary bump. Some experts predict that we’ve seen the last of sub-4% mortgage rates, thanks to strengthening inflation and broad-based economic growth.
Second, mortgage applications are also increasing. Applications were up in January by 4.1% compared to last year. This has been led by people looking to refinance their homes, while mortgage applications by homebuyers remained at steadier levels.
Third, housing supply continues to be increasingly tight, with 10% fewer homes on the market than a year ago.
What do all of these numbers mean for you?
The growth in mortgage rates shouldn’t affect the number of eager homebuyers very much because there is so much more demand than supply right now. However, this rise in mortgage rates might actually reduce the number of homes for sale even further.
Homebuyers should be looking to lock in the current, still fairly low mortgage rates. When mortgage rates increase further, homeowners will have less of an incentive to sell their current home and buy a new home, which will require a mortgage at a new, higher rate.
If you have any questions about where the current rates are at or you have any real estate needs we can assist with, please don’t hesitate to reach out and give me a call or send me an email. I look forward to hearing from you soon.