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With mortgage rates at multi-year low levels, it's no surprise that buyers are very motivated at the moment.
What's less well known are the actual figures that support the current levels of buyer sentiment.
We can obtain a good insight into this if we look at the Fannie Mae Home Purchase Sentiment Index (HPSI), which tracks consumers’ housing-related attitudes, intentions, and perceptions, by asking six questions from the National Housing Survey® (NHS).
For the past two months, the index has been at the highest levels for over a year. In May the index figure of 92 was the highest since May 2018.
June's figure showed a very slight drop to 91.5 but compares very favorably if we look at where the HPSI has been at over the past year:
July 2018 - 86.5
August 2018 - 88.0
September 2018 - 87.7
October 2018 - 85.7
November 2018 - 86.2
December 2018 - 83.5
January 2019 - 84.7
February 2019 - 84.3
March 2019 - 89.8
April 2019 - 88.3
May 2019 - 92.0
June 2019 - 91.5
What this clearly tells us is that buyers are wisely recognizing the opportunities that have opened up since mortgage rates descended below the psychological barrier of 4% during May.
There's no question that mortgage rates have a profound effect on buyer confidence. When they reached their 2018 high of 4.87% for a 30 year fixed home loan the December HPSI dropped to its lowest level of the year and for some time before then.
It makes so much sense to sell your home when buyers are in an upbeat mood, so don't hesitate to contact us and discuss your best current options.
As you may already be aware, 30 year fixed mortgages rates recently fell below the key 4% mark and have continued to travel South since then and we are now seeing the lowest levels for about two years!
If we take a look back through recent history, we can see how incredibly cheap home loans are right now.
Using Freddie Mac's table of average monthly 30 year fixed rate mortgages since 1971, we can take a trip back in time, in five year increments, to gain a better appreciation of why there is such a rare opportunity right now:
May 2014 - 4.19%
May 2009 - 4.86%
May 2004 - 6.27%
May 1999 - 7.15%
May 1994 - 8.60%
May 1989 - 10.77%
May 1984 - 13.94%
May 1979 - 10.69%
May 1974 - 8.97%
The highest ever average monthly 30 year fixed interest rate since 1971 was a sobering 18.45% in October 1981...
In the past 48 years, the average annual 30 year fixed rate has been at 4% or below on just five occasions...
Unsurprisingly, therefore, the Wall Street Journal has just reported that falling rates have created what it describes as an "application frenzy".
If you're selling, there is a clear current chance to capitalize on the fantastic levels of buyer sentiment in the market. If you're a buyer, you need to be aware that there are no guarantees that rates will continue to fall, so it's wise to follow the example of so many fellow purchasers right now and lock in a low rate as soon as possible.
We have excellent connections with the best mortgage professionals in the area, so please don't hesitate to contact us.