As mortgage rates rose last year, activity in the housing market slowed down (see my last email). And as a result, some homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.
Rates are beginning to come down—and buyers are starting to re-enter the market. The latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before. Well-presented homes in desirable areas are still flying off the shelf with multiple offers, well over asking.
Here’s what experts are saying about buyers returning to the market as we approach spring.
Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.
–Mike Fratantoni, SVP and Chief Economist, MBA
We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit.
–Thomas LaSalvia, Senior Economist, Moody’s Analytics
Bottom Line: If you’ve been thinking about making a move, let’s connect so you can learn about how to best present your property to the public. Presentation and proper pricing continue to be key elements for a fast and successful transaction.
If you’re looking to buy: They say, The best time to plant a tree is 10 years ago. The second best time is today. Even in a slow year, the Los Angeles market typically appreciates 6-15%. If you are having trouble with higher rates, explore 5/1 or 7/1 adjustable loans. I have a lender that still offers 4.75% for qualifying homes and even if you end up paying a slightly higher rate now, you can always refinance when the rates dip. Sale prices? Unlikely to dip.
You can refinance a loan and leverage a property. Rent never comes back to you.
— Me