Home prices continue to rise and mortgage rates appear ready to follow. Some skittish buyers are jumping into the market now, fearful what could happen if they wait.
After registering month-to-month gains of over 1% starting in September 2020 and reaching a high of 2% in July 2021, the increase in U.S. home prices appeared to slow down in the fall. But a rapid home value appreciation has reignited just ahead of the spring homebuying season, jumping from 1.2% in November to 1.4% in December, according to a new Zillow report.
Experts are blaming the return of big price gains on historically low levels of housing stock and a rush by buyers to beat a rise in mortgage rates.
Nationally, buyers in December had 19.5% fewer homes to choose from than a year earlier when inventory was already at a record low. And compared with December 2019, they found 40.5% fewer homes available for sale.
“It is a hint to us that perhaps the spring homebuying season is coming early,” says Alexandra Lee, an economist at Zillow. “We would usually expect the winter months to still be relatively slow. But with this re-acceleration and understanding just how hot the market has remained over the last year, the housing market is starting to heat up earlier than usual.”
Total housing inventory at the end of December amounted to 910,000 units, down 18% from November and down 14.2% from one year earlier (1.06 million), according to the National Association of Realtors.
The rise of the omicron variant of the coronavirus could be partially responsible, pushing homeowners to wait for infection rates to subside before listing, experts say. The uncertainty around long-term working arrangements could also play a part in keeping inventory low.
Here in Central Florida, the buying season seems to have kicked off a little sooner than previous years. I've already experienced multiple-offer situations with a few clients in January. This means that homebuyers are entering the market much sooner than expected and demand remains high for the limited inventory. Typically, our market doesn't ramp up until around March as buyers try to get settled by summer.
Home inventory is still about 60% below the norms, and new home construction is running about 9 or more months to completion for most builders. If you plan to buy and use a mortgage, it's a good time to consult with a lender. Get the big picture of your financial situation, clear up any possible credit hiccups, and ensure you'll have any cash needed for your earnest money deposit (around 1% of purchase price), inspections ($300 to $1,000, depending on home size & types needed), closing costs (3% to 6% of purchase price), and down payment (3.5% or more for FHA & conventional, 0% for VA & USDA).
My lending partner, Ryan Kennedy with AnnieMac Home Mortgage, can help!
If you need more info or would like to discuss how the process works, give me a call. I'm available for you.
Sean Rooney, Realtor
EXP Realty LLC
Original Article By Swapna Venugopal Ramaswamy on Florida Realtors