What if Buyers Run for the Hills as Mortgage Rates Rise? Will it scare them from buying?
Home sales are climbing and they’re selling more quickly. According to the National Association of REALTORS®, existing home sales rose strongly in September, propelled by first-time buyer sales reaching a 34% share, a high not seen in over 4 years! [Source]
It also helps sales a lot that current mortgage rates are pretty good. The typical prime mortgage borrower can now get rates in the mid 3’s, and an abundance of low- and no-downpayment mortgage programs out there are helping first-time and repeat buyersto purchase homes with very little equity.
Homes are not staying on the market for long. 27 days on market is what the average DOM is currently in the Northern Virginia and Washington DC area and just a month ago it was 33.
With homes not on the market long, low inventory, and everyone wanting to take advantage of low mortgage rates and no downpayment mortgage programs, it’s little wonder that indeed, multiple-offer situations are common in many U.S. cities and Home prices are climbing, as a result.
Not only was 27 days the median days on market of a home overall, but nearly half of all those homes sold in fewer than thirty days.
Why are they flying off the market? There are various reasons why today’s homes may be selling more quickly.One reason is the season. There are often more homes sold between March and September each year as compared to other months, and after an exceptionally cold winter, pent-up demand may have spiked this season’s data.
Another reason why homes may be selling like hot cakes is because today’s mortgage rates are the lowest they’ve been since January; and the best they’ve been since May 2013.
Buyer purchasing power is up more than 10% from the start of last year.
Demand for homes nationwide is outpacing the supply.
Median Days On Market can fall for many reasons. One reason is a better U.S. economy. A different reason, though, is that today’s sellers might feel less confident in their ability to sell their home.
Are sellers losing heart?
According to a Fannie Mae consumer attitudes survey, 40% of consumers think now “is a good time to sell” a home. That’s four percent less than the month before.
Once sellers stop saying “it’s a good time to sell”, it’s usually because they believe that housing is falling from a peak. As sellers lose confidence, then, homes are often listed at lower prices; sell faster than is usual, and go under contract at the “the first reasonable offer”.
The falling number of consumers who believe that now is a “good time to sell” suggests buyers can swoop in for good deals. Homes may begin listing at lower prices and selling with less negotiation.
It may be a seller’s market now, but it may not be for long.
Ready to buy or sell? Give me a call today! Let’s find out what your home is worth and how fast I think it will sell.