Redfin is reporting that increasing mortgage rates and home prices are causing buyers to step back and put their home buying plans on pause. Redfin analyzed the time that it took a home to go under contract from the time it was listed. This means the time that it took a home to receive and accept an offer from a buyer and mark the property as pending.
Home-selling speeds fell from 33.7% in April 2013 for homes that went under contract in less than two weeks to 27.9% in August.
Dramatic Real Estate Market Slow Down in the Sacramento Area
Redfin pointed out that the Sacramento area market experienced a notable speed change, slowing down the most in a year from 40% to 34.1% of homes that went under contract in less than two weeks. We have noticed these changes with our listings taking longer to get offers and fewer properties are getting multiple offers. Gone for now are the days where we got bombed with multiple offers the day the property was listed prior to any showings.
Mortgage Rate Changes
Even though mortgage rates for a time increased, they have recently dipped down again due to the Feds announcement to continue buying bonds and keep its stimulus program unchanged...for now.
In mid-August the 30-year fixed mortgage rate was over 4.7% and it has now dropped to about 4.3%. Even though the decrease is minimal it is getting some potential buyers back into the home-buying game as they are concerned that rates will go back up in the future. Hopefully this means in the coming months we see an uptick in home-selling speeds.
Now May Be the Time To Sell
Many real estate and finance experts are agreeing that if you have thought about selling your home sometime in the next 5 years that now is the time to do it before mortgage rates increase thus reducing the pool of potential home buyers for your property.
Week ending 9/26/2013 (Source: Freddie Mac)
- 30-yr. fixed: 4.32% fees/points: 0.7%
- 15-yr. fixed: 3.37% fees/points: 0.7%
- 1-yr. adjustable: 2.63% Fees/points: 0.4%