We bring to homebuyers good news! Mortgage rates are staying low, the 30-year fixed-rate mortgage averaged 2.91% by the end of last week, Aug 27, 2020. The 15-year fixed-rate mortgage also dropped eight points, resulting in an average of 2.46%. In addition, the 5-year Treasure-indexed hybrid adjustable-rate mortgage maintained on a 2.91% on average.
The low mortgage rates have served as an incentive for homebuyers, increasing homebuying interest to pre-2008 Recession levels. Despite this, home sales are not as expected when compared to last years. Even though last year the 30-year fixed-rate mortgage averaged 3.58% home prices are rising, as a result, buyers today can be paying more than what homebuyers offered last summer for the same kind of property.
This price increasing behavior has a logical explanation. When mortgage rates decline, buyers get good deals, but this leads to buying wars, which drive prices up, which perpetuates the whole cycle.
Median listing prices went up by 10.3% compared to last summer, according to Realtor.com. Let's not forget that currently there's a low housing supply in the U.S., which leads to properties leaving the market in record time. That's perpetuated and accelerated again by, you guessed it, bidding wars.
Do not get discouraged. Refinancing is starting to become less popular to existing homeowners, and lenders will focus their attention to homebuyers.
Remember to contact us at Castles Unlimited with all of your real estate needs!