We're now more than mid way through April and Realtor.com's Jonathan Smoke thinks the housing market is about to heat up. The main reason? Interest rates.
Mortgage rates are now lower than they ended in March. That means that rates are not only near the lows for the year to date, they are also close to the lowest rates in three years. These lower rates translate into increased buying power and/or improved ability to qualify for a mortgage.
Home buyers—many frustrated by their inability to buy last year—are acting with a real sense of urgency. The Mortgage Bankers Association reported that applications increased 10% this week. Averaging out the mortgage activity over the past four weeks, purchase applications are up 20% compared with last year.
Still the market is tight. A record number of Americans are looking for homes. That means would-be buyers need to act quick.
Because the number of would-be home buyers is growing faster than the inventory, the time listings spend on the market is dropping substantially. At a national level, the median days on market fell 14 days in the first two weeks of April relative to the first two weeks of March. If you are looking to buy in the hottest ZIPs in the hottest markets, there is a good chance that a listing you may view on Friday might be under contract before Monday.