Are the insanely low mortgage rates here to stay? Will the increase in home prices have any impact on those rates? Mortgage rates have been the saving grace for not only the uptick in buyer demand, but also the hike in home values. Will this trend continue into 2013? Most estimations are that mortgage rates will straddle the historical lows that have been set in 2012. Here are a few factors that have been influenced by the low-interest rates.
Buyer Incentive: Buyers wasted no time in taking advantage of the tumbling mortgage rates. The seemingly weekly drop in rates brought on a flood of buyer activity that has continued through the latter stages of the year. The combination of settling home prices and bottom basement interest rates should be ever-present into the new year.
Seller Bonanza: Many homeowners have been hesitant to sell their home and compete against distressed properties and short sales. The limited inventory has been a blessing in disguise for the overall housing recovery. Home prices have spiked up in most parts of the country because of the short supply and high demand for homes. Many sellers that did take the plunge were rewarded handsomely with multiple offers that exceeded their asking price.
Supply And Demand: Housing is no different from any other product desired by consumers, just to a higher degree. Mortgage rates has created many opportunities for first-time home buyers, investors and repeat buyers that might not have purchased if rates were higher. The light inventory has helped stir the buying frenzy this year.
Consumer Confidence: Prospects have to feel confident with their own financial standing and the overall economic situation to contemplate pursuing a home during these tumultuous times. Interest rates have certainly helped insulate many of these concerns for both home sellers and buyers. The housing market in Davis, California has had a 22% increase in home sales this year compared to same period in 2011. Those numbers are indicative of the confidence consumers now feel.
Future Mortgage Rates: Most economist expect rates to hover near the historical lows at least through 2013. The housing supply will stay relatively flat at the same time, which will continue the housing recovery over the next year. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs, join my professional networks on Twitter and LinkedIn and easy access to view local area homes for sale in Davis, California and the surrounding communities.