Low rates and high demand means it may be a good time to make a move.
Source: Steven Thomas Housing Report - April 22, 2019
Timing is arguably the second most important key to success in real estate, behind the #1 key we all know: "Location, location, location!"
When is the best time to make a move? Current housing conditions and trends point to now being the best time, for both buyers and sellers. Buyers can take advantage of low interest rates, and sellers can get the best prices possible as demand rises and inventory starts to decrease.
At the end of 2018, economic experts and major financial institutions were forecasting interest rates anywhere from 5.25% to 6% in 2019. That seemed more than reasonable given the fact that rates had climbed from 3.95% at the beginning of 2018 to nearly 5% by November. Yet, after an exceptionally rocky December for Wall Street and news of an economic slowdown in both China and Europe, interest rates retreated and dropped to 4%. Since then, they have risen slightly to about 4.2%, where they stand today. The bottom line, mortgage rates are back down to historical lows. It is a great time to be a buyer.
To put this newfound affordability in practical terms, if a buyer is looking for a payment of about $3,000 per month with 20% down, they are now looking at purchasing a home priced at $762,500 with a 4.25% mortgage rate. Compare that to last November when rates were just about 5%; that $3,000 per month payment allowed a buyer to purchase a home at $698,750. The drop in rates has allowed this buyer to purchase $63,750 more home for the same money.
These lower rates and surge in buyer demand has been beneficial for sellers as well, with growth in demand in recent weeks outpacing new inventory coming on. As a result, expected days-on-market (the number of days it would take for a home placed on the market today to sell) has dropped from 84 last month, to 76 days now. This kind of drop has not been seen during this time of year in a decade.
If you are thinking of thinking of making a move, let's get the conversation started!