Thanks to the Federal Reserve recently lowering interest rates by a half a point, bidding wars are back and it’s not uncommon for homeowners to receive multiple offers.
Fewer homes mean higher prices
Last spring, buyers had more of an upper hand as more properties came on the market and sellers tried to woo back house hunters turned off by high prices and higher interest rates.
Now buyers have fewer choices. At the end of January, there were 1.42 million units, including condos, co-ops and single-family homes on the market, up 2.2% from December, but down 10.7% from the same time last year, according to the National Association of Realtors.
January’s housing inventory was the lowest it’s been in 21 years, according to NAR.
Fewer homes coupled with high demand means higher prices. In January, the median sale price for housing including condos, single-family dwellings and new construction was $306,000, up 6.7% from a year ago, according to Redfin.
Mortgage rates continue to drop
But mortgage rates continue to drop as concerns about the coronavirus roil financial markets, leading the Federal Reserve to take the surprise step of cutting key rates by half a percentage point this week and more investors to put their money in bonds.
Rates for a 30-year fixed mortgage dropped to 3.56% this week, the lowest since October 2016, according to Bankrate’s weekly survey.
Low rates are a key reason the greater Boston metropolitan area has less than two months of single-family home inventory available for sale, says Jason Gell, president of the Greater Boston Association of Realtors.
“We’re seeing lots and lots of people, buyers, at open houses,” Gell says. “Interest rates are still extremely low so that … the actual monthly payments are fairly affordable.”
Source – USA Today
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