Home buyers are taking advantage of mortgage rates that continue to shrink. Per the realtor.com article below, rates dropped from 3.7% to 3.66% as of April 9. Compared to the first quarter of 2014, there has been a 20% increase in new-home purchases.
In Collin County, Texas, the inventory of homes priced from $200-299k is less that one month's worth. What that means is that there are only enough homes in that price range to last just under 30 days. The limited inventory is forcing buyers into new construction, where there is just over 4 months of inventory on the ground. Home buyers are choosing to buy new to avoid the countless bidding wars on previously owned homes that they can move into in a month and some change.
As the weather heats up, the housing market should follow the mercury. Be sure to get in on the action while the rates are low!!
New-Home Buyers Are Taking Advantage of Lower Mortgage Rates
“Overall, applications for new-home purchases during the first quarter of 2015 increased 20% relative to the first quarter of last year,” Lynn Fisher, MBA’s vice president of research and economics, said in a statement. “Continued strength in builder applications raises the likelihood that housing starts will be strong over the next few months.”
“Housing starts” is industry lingo for when a builder actually breaks ground on a new home. It’s a good measure of where the new-homes market is headed, since it takes months to go from groundbreaking to completion.
New-construction home sales are up as buyers opt to wait for a home to be built rather than compete in existing-home bidding wars. Buyer demand isdriving prices higheracross the board. The average loan size of a new-construction home increased to $314,394 in March from $311,379 in February, according to the MBA.
Still, mortgage rates fell as a result of lower-than-expected jobs numbers. The economy added 126,000 new jobs in March, well below market expectations of 247,000 jobs, according to the Bureau of Labor Statistics. The unemployment rate remained at 5.5%.
“We did see some uptick in wages, as average hourly earnings increased 7 cents for the month and are up 2.1% over the year,” saidLen Kiefer, deputy chief economist at Freddie Mac.
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