As one of the most popular times of the year to buy or sell a home, the 2017 spring housing market is off to an early start. See what mortgage rates, home prices, homebuyer traffic and home inventory are doing to shape this year’s spring market.
Mortgage rates have moved upward.
While still historically low, mortgage rates have been trending higher in 2017. According to Freddie Mac, the 30-year fixed mortgage rate average stood at 4.19 percent with 0.5 points as of January 26. The week of March 23rd, the average stood at 4.23 percent.
At their March meeting, the Federal Reserve made the as-expected decision to hike the federal funds rate. While Fed rate hikes don’t directly impact long-term interest rates like mortgages, gradual increases can be expected with an improving economy. Even a small increase in mortgage rates can significantly decrease buyers’ purchase power.
Existing home inventory remains low.
Heading into 2017, existing home supply had dropped to a 17-year low with a 3.6-month supply. A 6-month supply indicates a balanced market. Per the February Existing Home Sales report, inventory has bumped up to a 3.8-month supply, but the amount of homes for sale heading into the spring homebuying season could spur competitive sellers’ markets.
See our tips for shopping in an area with limited inventory here.
New home sales have jumped but pricing has eased.
New home sales increased 6.1 percent in February, but the spike in sales is attributed to seller concessions. The median new home sales price dropped 3.9 percent to $296,000. Year-over-year median pricing is in the negative column at minus 4.9 percent.
Homes are selling quickly.
While multiple-offer scenarios and limited home options could be a hurdle for prospective buyers, this spring could be a lucrative opportunity for home sellers. Days on the market are short, according the Existing Home Sales report. The average home stayed on the market for 45 days versus a year ago when homes sat for 59 days.
Interested in selling your home this spring? See the characteristics of sellers who sold quickly and above market prices here.
Home prices are still rising quickly.
Year-over-year, existing median home prices are up 7.7 percent at $228,400 for the month of February. While a report released by Realtor.com forecasted home price appreciation to slow to 3.9 percent in 2017, the most recent FHFA House Price Index is up 5.7 percent year-over-year.
Buyers, especially first-time homebuyers, will want to get off the fence before home prices and rising mortgage rates lessen their home affordability.
See our tips for buying a home you can afford here.
If you’re interested in buying or selling a home this spring, download one of free guides below. Our Mortgage 101 Handbook is a great resource for first-time homebuyers looking for knowledge of the homebuying and home financing process.