Has Spring Sprung Early for the Housing Market?
Demand for housing is picking up and housing analysts are pointing to lower mortgage rates as the main reason. The spring buying season may be coming early.
In Coppell, Texas, a suburb of Dallas, real estate pros reported a traffic jam of buyers lined up on the front stairway to get into an open house.
“It kind of caught us a little bit off-guard,” Laura Barnett, a real estate professional with RE/MAX DFW Associates in the Dallas area, told CNBC about the sudden uptick in buyer demand. “We actually did get a surge of buyers coming in. And, matter of fact, I worked with two this weekend, one of which is under contract; another is about to be.”
The 30-year fixed-rate mortgage increased for most of 2018 and neared 5 percent, prompting home sales to decrease. However, rates have been moderating in recent weeks, and potential home shoppers are taking advantage. The 30-year fixed rate mortgage averaged 4.46 percent last week, Freddie Mac reports.
Mixed with the lower rates, home prices are slowing too. Home prices in December were up 4.7 percent annually, the smallest gain in more than six years, according to CoreLogic, a real estate data firm.
“When you see those numbers coming down, you want to go, ‘OK, this is the time to buy,’” Celena Vittorio, a home shopper in the Dallas area, told CNBC. “You certainly don’t want to buy at the top of the market.”
Also in buyers’ favor recently, the share of homes with price cuts increased in January. The share of price reductions increased in 39 of the 50 largest markets, an analysis from realtor.com® found. The most expensive markets saw the largest price cuts.
The cities with some of the largest reductions in list prices were in Las Vegas (up 16 percent); San Jose, Calif. (up 9 percent); Seattle (up 8 percent); Orlando, Fla. (up 6 percent); and Phoenix (up 5 percent).
Real estate pros are responding to the increase in traffic by trying to get the homes that were going to wait to list until the spring ready to go to the market earlier.
Buyers are taking advantage of the price reductions and lower mortgage rates. “We don’t want to miss that opportunity, so we’re trying to get busy with our listings and start getting our listings on the market early,” Barnett told CNBC.