Welcome to March! I have a few points on my mind this week. There's been a lot of data to digest, so here we go. A really important first point is that FHA loans will be changing a bit starting on March 20th. The MIP (Mortgage Insurance Premium) will be reduced by 0.3% of the total loan amount. This may not seem like a lot, but on a $400,000 loan it comes out to about $100 monthly savings on the mortgage payment. Anything to make things more affordable for buyers, this helps a bit. Moving on, purchase applications were on a nice rise since November of last year, but have declined again likely due to mortgage rates hitting close to 7%. These fluctuations and lack of reliability of the interest rates are really not doing the housing market any favors. While we are seeing well priced homes, mostly in the lower ranges get gobbled up, we are still dealing with historically low volume. A buyer that applied for a home loan when rates were near 6% is most likely going to wait for them to come back down again, but how long will they stay there? The unpredictability is just not conducive to a prolonged housing search. Sellers are clearly paying attention and can feel the indecisiveness as inventory continues to fall. So, we continue to find ourselves in a low supply situation with demand ready and waiting to pounce. It is likely we see the bottom of inventory levels soon just based on seasonal forecasts and history. This will be important to watch. In a normal market, the average days on market is over 30 days and we are back there now. However, if we don't see more houses come up for sale, and interest rates tick down again (low 6s was clearly acceptable to buyers) then we could find ourselves in a market closely related to 2021. I'll have a new listing going live tomorrow. A 4 bed, 2 bath almost 1,700 sq ft in Parkway Estates at $422,500. This home is ready for new buyers to spread out and make it their own! I won't have a link until tomorrow, but if you know someone who may be interested, hit me up. What are you seeing or hearing? I'd love to know paul@guiderealestate.com |
