Higher Home Prices Bring Sellers Back
Higher home prices are bringing sellers back into the market according to a report released by ZipRealty, a national real estate company. Over the past couple of years, home prices have moved sharply higher because of a tight supply of homes available for sale. Homebuyers have been back before sellers, spurred on by record low mortgage rates and high home affordability.
Now that home prices are moving higher, homeowners are more willing take a chance and list their home for sale. ZipRealty's Housing Trends Report showed more new listings are coming to market. There are 8 percent more new listings in April 2013 than in April 2012. Although listings are higher this April over last, the number of homes for sale is 30 percent lower than last year because buyers are snapping up homes quickly. Average listing times for a home before going to closing is declining. ZipRealty CEO and President Lanny Baker said:
We’re seeing sales close quickly – in 32 days on average – at nearly full listing price or 98.9% of their asking price. In fact, homes are selling at 100% or more of their list price in nine cities we analyzed, and in two weeks or less in six cities we analyzed.
It's no surprise sellers are back in the market after suffering declines in most markets every year since 2007, the recent sharp increases has given millions of homeowners positive equity in their homes. The chance to sell a home quickly and lock in a low mortgage rate on a new home are also enticing factors to sell.
While mortgage rates have risen the past 5 weeks, rates are still very low historically speaking. Average 30 year rates are at 4.03 percent but you can find lenders quoting 30 year conforming rates below 4.00 percent. If you're willing to pay points on a loan you can still find 30 year conforming rates as low as 3.50 percent.
Average 15 year mortgage rates today are at 3.18 percent this week but there are many lenders quoting 15 year rates below 3.00 percent. If you're willing to pay 2 points on a loan you can find 15 year mortgage rates as low as 2.50 percent. The best mortgage rate right now without points on a 15 year loan is at 2.875 percent, still below the average of 3.18 percent.
ZipRealty's report showed median sales prices increased 16.4% in 24 metro areas on a year-over-year basis as of April 30, 2013. The largest increases year-over-year have happened in the California markets of The San Francisco Bay Area, Orange County, Sacramento and LA. The National Association of Realtors, CoreLogic, and Case-Shiller have all reported home prices increasing in the low double digits the past 12 months.
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