The current housing market is bustling with activity. There are fantastic opportunities for both the buyer and seller. Today’s market has some perks that we just don’t see all the time. Here are the top two that are seldomly at one’s fingertips.
The most talked-about benefit today for a buyer is the average mortgage interest rate. Last month saw the rates hit an all-time low for the eighth time this year. In fact, the Primary Mortgage Market Survey (PMMS) shows the 30-year fixed-rate at 2.88% which is the lowest rate in the history of the survey.
What does this mean to the buyer? In the current market, a buyer can get a lower rate than they have been able to obtain in the past two generations of homebuyers. Buyers have gained purchasing power because of the low mortgage rates.
“Purchasing power rose 10% year-over-year…With interest rates hitting record lows, buyers were able to afford $32,000 “more house” as of July 23 than they could the year before with the same monthly payment,” according to National Mortgage.
Today a buyer can purchase a home in a higher price bracket because they can afford more home with such low rates. This opportunity has not come around in the last 50 years and should be taken advantage of.
When it comes to the seller, low inventory is to their advantage in today’s housing market. The National Association of Realtors (NAR) explains that there is just not enough housing on the market for the number of buyers who want to currently purchase a home.
“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million),” according to the National Association of Realtors (NAR).
The graph shown indicates year-over-year inventory levels. The red bars represent the inventory of homes coming onto the market which is declining. Unfortunately, the housing inventory was low even before the pandemic hit. A huge shortage of houses on the market can be seen because the homes that are on the market are selling faster than they are being listed.
Lack of inventory has been a challenge in today’s market. Buyers are ready to purchase and take advantage of the low-interest rates. The shortage of inventory is causing more buyers to get hooked into bidding wars. According to Lawrence Yun, Chief Economist for NAR low inventory coupled with bidding wars are two factors that are keeping home prices solid.
“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply,” says Yun.
If you are in the market to sell or purchase a home, now is the time. Take advantage of these rare perks by contacting a local Realtor who can help navigate you through the process.
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