Spring home buying has officially begun and all signs are pointing towards busy months ahead for the real estate market. While weather conditions are one of the factors, which make spring as the ideal time for buying a house, it turns out more Americans are looking for a home in the market because of the lowered mortgage rates.
Mortgage applications have reportedly increased 10 percent last week, as mortgage rates continue to drop, reports Realtor.com. According to the publication, the current mortgage rates are close to its lowest in three years, which attract more Americans into buying a home this year.
Purchase applications are said to be higher than 20 percent as compared to data from last year. The publication also noted that more Americans are looking for homes in their database, with their current inventory of homes lower than last year at 2 percent.
This means that the time that a listing spends on the market continues to drop, as more buyers flock the market looking for a home to move into. According to the publication, the median number of days a listing spends on the market fell 14 days in the first two weeks of April.
In certain cities in Colorado, the median age of a listing is less than seven days. This means that buyers must act quickly if they have already found a house to buy in the market.
As previously reported here on Realty Today, buyers are flocking the market to take advantage of the lower mortgage rates. However, as the demand for new and existing homes for sale increase, so will the prices of homes in the market.
Buyers should also thoroughly consider whether they will be getting a fixed-rate or an adjustable-rate mortgage (ARM). An adjustable-rate mortgage may reflect lower payments initially, but as the rates go up, homeowners may eventually have to pay more for their mortgage.
