Home Sales Down
Home sales dropped 7.1 percent in February compared to the month prior, but it was not a sign of slackening buyer demand.
Home sales are still above year-ago levels. Severe weather in the Northeast and Midwest combined with demand that outstrips supply led to lower sales numbers, but higher prices.
Now that spring has arrived, buyers will be ramping up their home search.
Expect both sales numbers and prices to rise in the months to come. Buyers who want to be ready to make an offer are now requesting pre-approvals and rate quotes.
Home Prices Still on the Rise
The National Association of Realtors (NAR) reports the number of existing homes sold in their Existing-Home Sales report. Their report shows the number of existing homes sold in a month “annualizes” the findings to show one month’s sales as a 12-month figure.
An existing home is a home which somebody has previously lived in, as compared to a new-construction home.
The report also examines home price fluctuations. For February, which represented the forty-eighth consecutive month of year-over-year gains, the median existing-home price rose despite fewer sales.
More Homes Available To New Buyers
Buyers are facing a market in which homes are hard to find.
But this trend is easing. The number of existing homes for sale increased in February.
The new figures represent a four-and-a-half-month home supply, up from January’s four-month levels. Anything below a six-month benchmark is considered a seller’s market. Still, supply is approaching that point. This spring, buyers could have access to greater selection.
Real estate brokerage firm Redfin reports that new home listings rose nearly 12 percent in February, the fastest rate since February 2013. This could be attributed to the fact that sellers are eager to list their homes while buyers are paying some of the highest prices since before the housing downturn.
There is no lack of demand for their homes.
In February, more than a third of homes sold in less than 30 days; overall, properties stayed on the market for just two months.
Homes are being sold quickly. But buyers can relax a little, knowing that properties are being added to the market at an even faster rate.
Cashing in on Low Rates
While sellers may have the upper hand in a tight market, buyers can still reap the benefits of low-interest rates on home loans.
According to Freddie Mac, the 30-year fixed-rate conventional home loans decreased 20 basis points (0.2%) to 3.66 percent in February. That’s lower than the average commitment rate for all of 2015. With the Fed getting ready to potentially raise its benchmark rates again, mortgage costs might increase as well.
For both buyers and sellers, the state of the market – with its rising home prices, tight inventory, and attractive interest rates – create the perfect conditions to close sales quickly.
Ready to Spring Ahead
Getting a jump on the home buying process will help buyers move quickly should they find the perfect home in their price range. Start by getting a pre-approval letter from a lender that indicates you’re qualified and serious about your home buying plans.
When you begin working with a real estate agent, your pre-approval letter will fast track your home buying journey.