Mortgage Rates Drop as Demand Rises

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The first quarter of 2021 realized an annual rate increase of 12.3% in total existing-home sales from a year ago according to the National Association of Realtors This Week in Real Estate. Time on market decreased 38% to just eighteen (18) days in March 2021 compared to twenty-nine (29) days in March 2020. An astounding 83% of homes sold in March were on the market for less than a month. Below are a few newsworthy events from the third week of April that influence our business: 

Housing Market Reaches Record-High Home Price and Gains in March. The month of March saw record-high home prices and gains. While each of the four major U.S. regions experienced month-over-month drops, all four areas welcomed year-over-year gains in home sales. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums, and co-ops, decreased 3.7% from February to a seasonally-adjusted annual rate of 6.01 million in March. Sales overall climbed year-over-year, up 12.3% from a year ago (5.35 million in March 2020). Existing-home sales in the West fell 8.0% from the month prior, posting an annual rate of 1,270,000 in March, a 15.5% rise from a year ago. The median price in the West was $493,300, up 16.8% from March 2020. Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. Eighty-three percent of the homes sold in March 2021 were on the market for less than a month.

New Home Sales Jump in March on High Consumer Demand. New single-family home sales surged in March as housing demand was supported by low-interest rates and strong consumer demand, despite the ongoing building materials challenges impacting the housing industry. The U.S. Department of Housing and Urban Development and the U.S. Census Bureau estimated sales of newly built, single-family homes in March at a 1.02 million seasonally adjusted annual pace, a 20.7% gain over upwardly revised February rate of 846,000 and is 66.8% above the March 2020 estimate of 612,000. This is the strongest seasonally adjusted annual rate since September 2006. 

Weekly Mortgage Demand Jumps 8.6% After Interest Rates Fall to a Two-Month Low. A sharp drop in mortgage interest rates sent homeowners and potential homebuyers to their mortgage lenders. According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume surged 8.6% last week compared with the previous week. That is the first overall increase in weekly applications since the end of February. “Mortgage rates dropped to their lowest levels in around two months, prompting a small resurgence in refinance activity after six weeks of declines,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Borrowers acted on the decrease in rates for most loan types, with both conventional and government refinance applications showing gains.” Mortgage applications to purchase a home increased 6% for the week and were 57% higher than a year ago. 

Did you know every home listed for sale with Berkshire Hathaway HomeServices Northwest
Real Estate is eligible to receive no obligation home warranty coverage from American Home
Shield or 2-10 Home Warranty the first six months the home is listed with our company?

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