If you want to buy a house, you better be ready to act quickly: houses are selling at a record pace this spring, even as prices keep climbing.
The typical home on the market sold in just 15 days during the four-week period ending May 8, according to data released last week by real estate broker Redfin. This is the fastest pace since Redfin started tracking this data in 2012.
Perhaps unsurprisingly, the time when homes are selling at this blistering rate also coincides with the perfect time to list a home, according to Realtor.com.
“Sellers listed in mid-April can expect to find relatively high buyer interest, coupled with limited competition from other sellers, which equates to quick-selling homes at the best price,” a said Danielle Hale, chief economist of Realtor.com, in a March statement. Release.
Rising mortgage rates and few homes for sale
The latest round of fast home sales occurred even as the cost of ownership rose. Mortgage rates soared, hitting 5.30% last week – their highest level since 2008. The median house price is up 17% on an annual basis, according to Redfin, and the typical monthly mortgage payment has rose 44% last year to $2,427.
As owning a home becomes more and more expensive, you can expect the market to cool down as some buyers get prices off the market. But instead, the Redfin report suggests that buyers remaining in the market are “rushing to buy homes before they get even more expensive”.
Even though the rate hike has already “taken a noticeable chunk of demand,” said Redfin chief economist Daryl Fairweather, “homebuyers who remain in the market face fierce competition, especially for the most sought after homes.
No wonder a significant majority of Americans now say it’s a bad time to buy a home.
Fairweather attributes the stiff competition in the market to a continued shortage of inventory. “It would take a much bigger drop in demand for buyers to really feel like the market has really turned in their favor,” she said.
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