Spring home buying season is here, and all the signs indicate that it’s time for buyers to make their move. Buyers in the market should take advantage of the decreasing mortgage rates to secure the home of their dreams. Read more in this The Mortgage Reports article by Aly J. Yale.
All signs a go
Decreasing mortgage rates, rising wages and a finally improving supply of inventory all spell good news for the housing market. In fact, according to one expert, “a stronger than expected” spring homebuying season lies ahead.
A strong spring season
According to Mark Fleming, chief economist at First American, spring is shaping up to be a good season to buy a home. Just this week, mortgage rates notched down to an average 4.28 percent on a 30-year loan, according to Fannie Mae — their lowest point in some time. Throw in increasing wages, and buyers have it even better.
“The last three months have been kind to potential homebuyers,” Fleming said. “While mortgage rates increased throughout most of 2018, they began to trend downward in December and have continued to fall since then. All the while, average household income has trended up, boosting house-buying power.”
These lower rates don’t just increase purchasing for buyers, but they also encourage existing homeowners to join the market. As Fleming puts it, these owners were “rate locked-in” when mortgage rates were rising. Now that they’ve dropped, homeowners might consider purchasing a new house at a lower rate, creating more housing inventory in the process.
The Millennial factor
Fleming says there’s also the Millennial factor to consider. Many Millennials have been priced out the market historically, and today’s lower rates are inching the door to homeownership back open.
“The increase in house-buying power directly contributed to a gain of nearly 131,000 potential home sales in the last three months, by far the strongest driver of market potential,” Fleming said.
An extra boost in new construction is also likely to help the housing market as we head further into 2019.
“The recent increase in housing starts means home builders are pushing through new construction projects, which should help alleviate the supply shortage in the future,” he said. “The net effect? We expect the spring home-buying season to be stronger than anticipated just a few months ago.”