An historic drop in mortgage rates during the pandemic last year led to soaring home prices and reduced inventory.In Houston, inventory of single family homes plunged 28% year over year in February. That might change.
“Mortgage rates were at record lows through January, but mortgage rates have started to climb as the economic outlook has improved,” says Bankrate.com mortgage analyst Jeff Ostrowski.
The numbers for March aren’t out yet, but in February, the Houston housing market celebrated nine straight months of positive sales, and set a pricing record single-family homes – and that was during the February Freeze.
According to Ostrowski:
Mortgage rates fell below 3 percent in 2020, and home prices jumped more than 10 percent for the year, according to the S&P CoreLogic Case-Shiller index. Housing experts say an uptick in mortgage rates won’t cool this hot housing market — but a more pronounced increase to 4 percent or higher could slow price appreciation.
Mortgage rates aren’t the only factor affecting home prices — nor are they the most important variable. This boom is being driven by a sharp imbalance between the number of homes on the market and the number of buyers vying for those properties. The inventory of homes for sale in January 2021 fell nearly 26 percent compared with January 2020, the National Association of Realtors reports.
The supply of new homes isn’t enough to fill the void. Even as homebuilders put up new houses as quickly as they can, builders are hampered by a tight supply of lots zoned for new homes.
For the latest mortgage rate information, please head to: https://www.bankrate.com/mortgages/mortgage-rates/.
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