Spring Frenzy

Entering into 2022, the consensus among much of the real estate industry was that the spring housing market—the industry’s peak season—would be a bit less frenzied this year. After all, we thought it had peaked with the 2021 spring housing market, when over 70% of home listings saw a bidding war, right?

 

Unfortunately for would-be homebuyers, that simply is not the case. Not only does the spring housing market look like it will be red-hot, but there is also a chance that this goes down as the hottest spring homebuying season ever. Already, bidding wars are picking up again.

 

If you are considering buying or selling a home, you are likely keeping your eye on what is happening with mortgage rates. Rates have been climbing in recent months, especially since January of this year. Just a few weeks ago, the 30-year fixed mortgage rate from Freddie Mac approached 4% for the first time since May of 2019. But that climb has dropped slightly over the past few weeks. Experts believe the recent decline in mortgage rates is primarily due to growing uncertainty around geopolitical tensions.  

 

Industry insiders had hoped that inventory levels would begin to rise heading into this year. The thinking was that more elderly homeowners, who were cautious about moving during the pandemic, would begin to list their homes as the pandemic subsided. Additionally, it was expected that some struggling homeowners who were exiting the COVID-19 mortgage forbearance program—which began to wind down in September 2021—would list their homes. Inventory levels did begin to rise last fall, but that fizzled out by November as the number of homes for sale began to shrink again. In fact, inventory levels in January 2022 were 42% below January 2020 levels.

 

The bottom line is that the housing market is even tighter now than it was heading into the frenzied spring 2021 housing market. Yet, although mortgage rates are higher, they are still relatively low, and many buyers are opting to purchase now, before rates rise as anticipated.

 

Debbie Austin is a realtor associate with Keller Williams, Roseville and has been helping clients buy and sell property in the area for 18 years. If you have a specific real estate question you wish to see addressed, contact Debbie at debbieaustin@kw.com or debbieaustingroup.com