Buyers Rush to Lock in Low Interest Rates
The spring homebuying market is typically marked by higher sales and a greater number of house hunters, but many real estate professionals feel a spring-like market has been in full swing since the pandemic began a year ago.
“There will be no spring homebuying season in 2021, as we’ve been in it the entire time,” Bob Bradley, a real estate professional in Orange, Calif., told Bankrate.com. “Major markets haven’t had the chance to experience the typical winter decline in sales typically seen pre-pandemic. With interest rates starting to rise, buyers continue to scramble and compete with over-asking offers on single-family homes.”
Recent rises in mortgage rates don’t seem to be deterring would-be buyers either. (Read more: Mortgage Rates Continue Slow Climb Over 3%) “People are making a mad dash to try and take advantage of what are historically low interest rates,” Jeremy Sopko, CEO of Nations Lending based in Independence, Ohio, told Bankrate.com. “And as rates have ticked up over the last couple of weeks, this has only fueled the fire. Second, you’ve got a pandemic-induced population shift. It’s no longer necessary for millions of people to live in or near large cities. No longer tied down to small apartments with high rents, they are free to explore elsewhere.”
Here’s where the housing market is starting from for this spring season:
- Inventory of homes for sale dropped in February by nearly 49% compared to 2020.
- The median listing price increased to $353,000 in February, up about 14% over a year earlier.
- Mortgage applications of new home purchases increased 19% in January 2021 compared to a year earlier.
- Seventy-one percent of homes sold in January were on the market for less than a month.
“The days on the market have been very swift throughout the winter, with no let-up,” Lawrence Yun, chief economist of the National Association of REALTORS®, told Bankrate.com. “Though more inventory will show up in the spring months—around 20 percent above winter level—new sets of buyers will also emerge. Therefore, it will still feel like an overheated market with too many buyers chasing after too few homes.”
Source: Realtor Magazine, “COVID Spurs Early Start to Spring Homebuying Season: ‘A Mad Dash,’” Bankrate.com (March 11, 2021)
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