We’re here to help you keep your clients stay informed on the latest market changes and what actions they can take to stay ahead of the game. Here are a few key facts from the National Association of Realtors (NAR), published in the first week of November 2020.
For the month of October, home sales were 22% higher than last year. After a COVID-induced coma this spring, the market began to pick up in June as people emerged from their homes. Despite COVID cases rising, home sales have stayed strong, hitting a peak in September, and showing no signs of slowing down.
Mortgage application rates reflect the intention to buy or refinance, so they are one of the best indicators of demand. The latest reporting shows that mortgage application rates are up over 23% above last year’s rates, and they seem to be continuing to inch upward.
Since COVID and the economic downturn, the Fed has tried to bolster the economy by reducing interest rates. Historically low rates (plus COVID cabin fever) have been pushing the housing market across the country into overdrive ever since the initial shelter-in-place orders have lifted. And with the Fed planning to keep rates low for some time, there isn’t likely to be a slowdown in demand any time soon. On top of that, unemployment rates, though still higher than before COVID, have been on a steady decline - which means even more eligible buyers may be entering the market.
There just aren’t enough homes to satisfy all the interested buyers. New construction helps, and it has picked up a bit, but not enough to offset the lack of foreclosures as the moratorium continues. Overall, new listings are up only 5% year over year. The result is that the average home price is up15% higher than last year!
The gap between paying a mortgage and renting had been narrowing since before COVID, but the reduction in interest rates has caused rental prices to exceed average mortgage prices consistently since July of this year. While a mortgage still has more up-front costs, on average the monthly payments are cheaper than the average rent- by over $100 per month!
It’s a seller’s market, and homeowners may begin to see the value of putting their home up for sale to get top dollar, and hopefully trade up. First time homebuyers may feel encouraged by the low rates and savings potential, and choose buying vs renting. Investors may want to pick up more rental properties. At the same time, some homeowners will plan to stay put - but refinance to get a lower rate.
With demand high and supply low, potential buyers must be poised and ready to move quickly. If an eligible house appears on the market, competition will be fierce. Buyers should have financing in place and make a competitive offer right away if they expect to snag their dream home.
Buyers and refinancers will be shopping around for lenders they can trust - who can offer them competitive prices, plus an ability to get deals done quickly. That’s why we have perfected our mortgage process. H2Online is our way of turbo-charging the loan application and closing, so you can serve your clients quickly and accurately. We don’t want you to miss a beat.
We’ll keep you updated with the latest market trends and provide the tools and resources you need to enable others to own the dream. Helping others realize their dreams is our daily passion. We live it, we breathe it, we work it. Partner with us and learn how you can join the Caliber Club today.