It’s no secret that peak homebuying season starts towards the beginning of the year and continues until mid- to late- summer. With homeowners looking to buy primarily starting in March up until the end of August or early September, these months are when we see upticks in homebuying activity. However, as we officially kick off the season of fall (hello, cool weather), we’ve been seeing a continued summer intensity in homebuying that has carried over into what would otherwise be a typically be a slow season. The reason? Low-interest rates.
What’s Going On?
The 30-year fixed-rate mortgage has fallen below 4%, currently at 3.57% as of Thursday, according to Freddie Mac. Last year at this time, the rate exceeded 4.7%. Because of this, mortgage demand has steadily been on the rise with Trading Economics reporting mortgage application percentage reaching 8.1 at the beginning of October. What does this mean? Buyers are looking to buy, now. “As buyers get lower interest rates, their spending power increases,” says Jennifer McMurray, a Realtor and Real Estate Expert writer for Homes.com’s blog. Housing applications have also risen .9% in the past month.
Benefits to Buyers
It’s a no-brainer that it’s a buyers market. Low-interest rates and fixed-rate mortgage percentages mean less money being spent in the long run for consumers. Those who will see the most immediate effects are the buyers looking to utilize an adjustable-rate mortgage, also known as an ARM; however, buyers who take advantage of the fixed-rate mortgages will still see those effects, just not as short-term.
Benefits to Sellers
If you’re looking to sell, now would be the time to start listing your property. With interest rates being unusually low at a transitional point in the homebuying season, sellers should also be reaping the benefits. McMurray says, “A low interest rate is a good thing for buyers- but even for sellers it helps generate more interest from buyers. [It also] allows buyers to potentially spend more on a home purchase as they are paying less in interest over the life of the loan.”
If you’re looking to buy, sell, or rent, visit Homes.com to find step-by-step guides that will walk you through the entire process. Or, visit Homes.com’s Blog for all of your quick and easy go-to resources, celebrity homes for sale, home improvement, and more!