The 2014 Spring Selling Season will be impacted mostly by mortgage rates and the number (and quality) of homes coming to market.
From the Mortgage Bankers Association:
Rates for jumbo mortgages remain two basis points lower than for the 30-year conforming loan as both increased 10 bps for the week ended Dec. 6, according to the Mortgage Bankers Association.
The average contract rate for the 30-year conforming is at 4.61% and for the 30-year-fixed jumbo it is at 4.59%, the MBA says.
A rate of 5% won’t be the end of the world. But buyers have a natural expectation of higher rates being reflected in the pricing – and yet sellers will have a hard time resisting the urge to tack on a little extra.
The super-premium properties won’t have much trouble selling. The impact will be felt in the ‘tweeners’ – the homes that aren’t fixers, but are in between. Their locations are so-so, condition is average to dated, and in general just not anything too special about them.
The tweeners got picked up in the frenzy, as buyers were is such a rush that they overlooked things they shouldn’t have. Without frenzy conditions, that won’t happen again – will it?
The housing stats in news have been fairly negative, and the foreclosure crisis is apparently over. Without a frenzy-push to ignite the market, there should be plenty of hesitation on both sides in early-Spring.
Rates will probably be a deciding factor for many buyers on whether to pay more, or wait. Where will they be in a couple of months – especially when dancing around the Fed-taper question?
Susan said this morning, “Rates are following the 10 year treasury yield. This morning as I type it’s up to 2.89. As soon as we are over 3.0, I’m afraid there’s no looking back!”