The next couple of weeks in real estate news will bring reports on March’s new- and existing-home sales. For us housing economists, it’s the true harbinger of spring! But I’d like to do something a bit more helpful for consumers looking to buy a home.
So here’s my take on what’s going on in the market right now, and what the rest of April will likely see.
Mortgage rates are now lower than they ended in March. That means that rates are not only near the lows for the year to date, they are also close to the lowest rates in three years. These lower rates translate into increased buying power and/or improved ability to qualify for a mortgage.
Home buyers—many frustrated by their inability to buy last year—are acting with a real sense of urgency. The Mortgage Bankers Association reported that applications increased 10% this week. Averaging out the mortgage activity over the past four weeks, purchase applications are up 20% compared with last year.
A record number of Americans are actively searching and looking at the current inventory on realtor.com®. We currently have 2% fewer homes for sale in the U.S. relative to last year, but we’ve seen 137,000 new listings come onto the market so far in April.
Because the number of would-be home buyers is growing faster than the inventory, the time listings spend on the market is dropping substantially. At a national level, the median days on market fell 14 days in the first two weeks of April relative to the first two weeks of March. If you are looking to buy in the hottest ZIPs in the hottest markets, there is a good chance that a listing you may view on Friday might be under contract before Monday.
For example, in Colorado’s Aurora, Arvada, Littleton, and parts of Denver proper, the median age of a listing is now less than 7 days. Gladstone, OR, and parts of Seattle are the same.
The list of areas broadens for places where the median age of a listing is over one week but less than two weeks. Those towns include Cambridge, MA; Pacifica, Berkeley, Los Altos, and Sunnyvale, CA; Centreville, Burke, and Henrico, VA; Berkley, MI; Colorado Springs, CO; Boise, ID; Clifton, NJ; Salt Lake City and Sandy, UT; Fort Worth, TX; Louisville, KY; and Buffalo, NY.
Every region of the country has towns where inventory is moving rapidly this spring.
Looking ahead, great weather will likely draw even more people to look at open houses and available homes over the rest of the month. According to Cleveland Research, after a cooler than normal start to April, the weather forecast for the next 10 days is expected to be “near perfect” across many of the largest housing markets in the country, especially in the central and eastern U.S.
Their report shows that most major markets will be warmer than normal for April, but not too hot. The one negative could be slightly more showers than last year. So pack an umbrella.
But who cares about a national or regional weather or housing forecast? What matters most are the trends and conditions in your neighborhood.
If you are hoping to buy a home this spring or summer, the key to success will be finding an expert local Realtor® to help you in this competitive real estate market that overall favors sellers. As the chief economist at realtor.com, I have real-time visibility into the active inventory in the country, but even I wouldn’t waste too much time on my browser. So get out there, enjoy the sunshine, and find your dream home!
