After attending two conferences in recent weeks, speaking with industry leaders, and CEO’s from around the country, one thing is clear; real estate markets around the country are rapidly gaining steam and candidly, faster than most anyone had expected.
This is great news for an industry that has been ailing for almost four years. In many markets, increased sales have already brought inventory levels back to historically normal levels, prices have stabilized and are actually beginning to increase again.
Housing values are dependent on three factors, supply, demand and interest rates. Over the past 36-48 months, much attention has been paid supply and demand. Diverse sources believe that supply levels are peaking and we know from reports across the industry that written business is spiking.
Savvy real estate experts are now turning their attention to interest rates. Currently at historic lows, many in the industry believe it is very possible that rates are poised to rise. Dan Green of the Daily Market Reports recently stated:
“The Fed sees growth coming faster than originally expected. There is suddenly less chance that the Federal Reserve will intervene to help keep mortgage rates low. Absent Fed intervention, mortgage rates are apt to rise and Wall Street is now betting that the Fed has bowed out. With no stimulus, mortgage rates will rise.”
Depreciated home values and artificially low interest rates are temporarily combining to push home affordability to it’s most advantageous levels seen in decades. To learn more about the home affordability index published by the National Association of Realtors, click here.
History has shown that when rates rise, it often happens quickly. When they do, mortgage rates will still be good, but not the great rates we have in place now. Savvy buyers are realizing this and moving now to secure the real estate buying opportunities of a lifetime.