If you are in the market to buy a home, you are probably watching interest rates very closely. Have you noticed that they are starting to trend upward? We are beginning to see a slow climb to over 3%. Of course, they are still incredibly attractive!
Interestingly enough, the uptick in rates hasn’t dampened the real estate market. If anything, more buyers are rushing to take advantage of rates before they go up higher. Buyers are scrambling to take advantage of what are still historically low rates and continue to find themselves competing with multiple offers on properties.
Spring 2021 Housing Market
According to the National Association of Realtors, 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.
According to Lawrence Yun, chief economist of the National Association of Realtors, “The days on the market have been very swift throughout the winter, with no let-up. 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.”
That’s true nationally, and it’s certainly true locally. So, whether or not rates rise, the over-heated real estate market continues to be on fire!