In the September, Market Trends report is out. Amid COVID-19, social justice rallies, a crippled economy, millions out of work, and a contentious election, the real estate continues to hold the American economy up.
Lawrence Yun, Chief Economist at the National Association of Realtors, says if not for the crippled economy we’d see 20% more sales. That’s HUGE and signifies how big market demand is for homes. Mortgage applications, another indicator of how strong the market is, are up 28% compared to last year – and it’s all thanks for millennial first-home buyers.
And record-low interest rates are fueling demand even more.
Now is the time for Realtors and brokers to be leaders and educate clients about what’s happening in the market, even if the news isn’t great for keeping buyers happy. The news of the day: lack of inventory, multiple offers, yet a lack of expected home value sold increases. Average and median closing prices both landed under a 1% increase. The year-over-year average has been about 11.7% while the median closing has gone up 9.18% from last year.
Attached and detached homes both saw a year-over-year increase, but detached is experiencing a much higher increase now. Many buyers want to move out of dense attached neighborhoods in cities due to COVID. However, as older generations look outside of cities, first-time buyers are scooping up the available attached homes.
Is moving out to bigger homes with more land the right move for your clients? As leaders and educators, you need to pose that question to buyers who are thinking about TODAY as opposed to TOMORROW. Whenever the world returns to normal post-COVID, demand will return to the urban areas – and they should be thinking about their future.
The stock market gains and transfer of wealth to millennials will tempt buyers to spend more on a home outside the cities. Detached homes valued over $500,000 have seen the largest increases this month. However, thanks to millennials staying in cities on tighter budgets, attached homes valued between $300,000 and $750,000 experienced the highest increase in attached homes sold. While the overall economy struggles, the Federal Reserve has said they’d like to see inflation – the arch-enemy of bonds – go past 2%. While Fed actions don’t directly affect interest rates, we can expect 30-year mortgage rates to go up as well. The last time the Fed slowed down on mortgage-back securities purchases in October 2018, rates consequently went up.
If your clients need a mortgage lender who knows how to strategically act on locking in a mortgage rate to gain the best advantage possible while ensuring they’re best prepared to act quickly on a home, you know who to call.
The Rueth Team of Fairway Independent Mortgage Corporation
750 W Hampden Avenue, Suite 500
Englewood, CO 80110
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