For today’s market update, I’m excited to be able to show you all the sights of Barcelona.
First, things are heating up back in our Louisville/Southern Indiana area. It was a slow December and January, but things have changed as we head into March. On both a local and national level, the housing supply has been steadily increasing the last several months. Mortgage rates, meanwhile, decreased as we began 2019. In January, the average 30-year fixed rate was 4.46%.
Mike Fratantoni, the chief economist at Mortgage Bankers Association, is quoted as saying, “The spring home buying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market.”
Meanwhile, Lawrence Yun, the chief economist at the National Association of Realtors, says, “The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
Finally, Aaron Terrazas, the senior economist at Zillow, says, “There are strong reasons to believe that the housing market is more responsive to changes in the interest rates than in the past—accelerating when rates drop and slowing when rates rise. Mortgage rates hit seven-year highs in November but then fell back in December. If they remain low during the early months of 2019, the housing market could see a modest reacceleration.”
Buyers and sellers should take note that home appreciation should continue in both 2019 and 2020. Also, most listings enter the market in April, May, and June, which is why we’re telling our clients to list their homes in March.
There are some interest statistics being reported about homebuyer trends. NerdWallet predicts that approximately 32% of Americans plan to purchase a home in the next five years, with millennials accounting for 49% of that contingency, and Gen Xers and baby boomers accounting for 35% and 17%, respectively.
When polled, a majority of current renters said they planned to buy a home, citing rising rental costs and not being allowed to have pets as some of the reasons behind their sentiment. However, 49% of them believe that you need a 20% down payment to buy a home, which is false. You can buy a home for a down payment as little as 3.5%.
Furthermore, 24% of renters believe you need a credit score between 780 and 800 to be considered for a mortgage, and that’s also false—you only need a credit score in the high 500s to be able to apply for a mortgage.
At the 4:00 mark in the video above, you can join us as we tour Barcelona and other parts of Spain.
As always, if you have any other questions about our market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to us. We’d love to help you.