RMLS reports showed massive increases in buyers looking at homes during the week ending January 22, 2017. Washington viewings were up 54.3% while Oregon viewings increased by 47.8%.
It is not unusual to see almost frenzied buyer activity during the month of January. We’ve seen it every year since the housing market recovery began in 2012. This year buyers are citing the added pressure to find a home as quickly as possible because we are seeing significant increases in mortgage interest rates which has many buyers scrambling to lock in a their home before rates go any higher. Buyers are very aware that banks will have free reign to start raising rates as quickly as possible this year, especially since President Trump has been saying that he will be rolling back many banking regulations via Executive order very quickly. The only thing that has kept a slight damper on massive rate hikes since Trump’s election is competition. Banks do want your business, so they can’t charge ahead and start increasing rates willy-nilly so to speak.
But in talking with mulitple mortgage lenders, I’m finding that rates are anywhere from 1/2% – 1% higher than they were just a couple months ago. Last week, lenders quoted best 30 year mortgage rates ranging from 3.8% – 4.5%! That’s a huge range, so it definitely pays to shop around. The average rate quoted was 4.25% for all the lenders surveyed.
One of the factors that is hindering buyers in the Portland metro area is the extreme shortage of inventory. As of the end of December 2016, inventory had again dropped to almost record lows at 1.3 months (the amount of time it would take to sell all inventory if no new listings are added.)
Buyers do need to be aware that the shortage in inventory with high demand WILL push prices higher. If you couple the higher prices with higher rates, unfortunately many potential buyers could find themselves priced out of the market.
You might like to read How inflation affects your ability to buy a house ~ perhaps more than you think.