A Strong Spring Housing Market Expected With Homes Still Moving FastFebruary 27, 2018
The spring housing market is expected to be a good one with prices still rising, inventory still tight, and homes selling on average in less than two months of being listed. Here are more about these three factors that signal a strong spring housing market, based on information from the Redfin Real-Time Housing Market Data Center.
3 Factors Affecting the Spring Housing Market
1-Home Prices Are Up
In January, home prices were up by 7.8% compared to the same month a year ago. The average national median sales price of single-family homes in the U.S. was $280,500. Also interesting is the fact that approximately one in five homes sold above the list price.
2-Inventory Is Down
The number of homes for sale in January was down by 14.4% over January 2017, the 28th consecutive month that home inventory has dropped in the U.S. Primarily because of the shortage of homes, sales volume was also down by 7.9%. The number of homes on the market in D.C., for example, was down by 18.6% over January 2017, with new listings down by 7.3% and overall sales volume down by 12.8%.
3-Homes Are Selling Fast
Homes moved six days faster than a year ago, on the market just 53 days before selling, indicating that the market is very competitive.
What About Rising Interest Rates?
Interest rates are rising, with the rate for a 30-year fixed rate mortgage predicted by some financial experts to be up to 5% by the end of 2018. But how much will higher rates affect market strength? Well according to a Redfin survey, only 6% of respondents said they would cancel their plans to buy a home if rates rose above 5%. In fact, 21% said it would increase their urgency to purchase a home faster. Another 21% said that while they would still buy a home, they would look for one that was less expensive.
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