Two positive trends have started to emerge that impact the 2019 Spring Housing Market, nationwide. Mortgage interest rates for a 30-year fixed rate loan have dropped to new lows, right as reports show that wages have increased at their highest rate in decades!
These two factors have helped keep housing affordable despite low supply of houses for sale driving up prices. First American's Chief Economist, Mark Fleming, explains the impact,
"Ongoing supply shortages remain the main driver of the performance gap as the housing market continues to face an inventory impasse – you can't buy what's not for sale.
However, an unexpected affordability surge, driven primarily by lower-than-anticipated mortgage rates, rising wages and favorable demographics, has boosted housing demand."
Mortgage interest rates had been on the rise for most of 2018 before reaching their peak in November at 4.94%. According to Freddie Mac's Primary Mortgage Market Survey, interest rates last week came in at 4.20%.
Average hourly earnings grew at an annual rate of 3.2% in March, up substantially from the 2.3% average pace seen over the last 10 years.
These two factors contributed nearly $6,000 worth of additional house-buying power for median households from February to March 2019, according to First American's research. Fleming is positive about the prolonged impact of lower rates and higher wages.
"We expect rising wages and lower mortgage rates to continue through the spring, boosting housing demand and spurring home sales."
Low mortgage interest rates have kept housing affordable throughout the country. If you plan on purchasing a home this year, this would be a good time while rates are still low! Find your local Montague Miller & Co real estate professional here who can help you plan how to move forward.
by Keeping Current Matters
First Published by Charlottesville Area Association of REALTORS® and Virginia REALTORS®, May 1 2019
According to the Charlottesville Area Association of REALTORS®, Charlottesville-area home sales dropped during the first three months of 2019, but at the same time, home prices increased slightly and the number of homes on the market remained about the same. The graphic on the right represents the Percent change compares to 2018 1st Quarter statistics.
• Notwithstanding a modest employment decline in the most recent months of data, the Charlottesville regional economy is stable and provides a steady bedrock for the local housing market, though there may be early signs of softening demand.
• Mortgage interest rates remain at historically low levels. Potential homebuyers and sellers should expect rates to remain low, at least through the spring and into the summer.
Housing Market Conditions
• Sales declined or remained flat in most jurisdictions in the CAAR footprint in the 1st quarter compared to last year. The moderating sales activity began in the 4th quarter of 2018 after several years of growth at the region-level.
• The regional inventory of active listings is not shrinking at the same rate as the past few years and has remained flat for several quarters, which could reflect a stabilization of the supply in the coming months. Similar trends are occuring in other housing markets in the state.
• Homes are taking slightly longer to sell relative to last year in many parts of the CAAR footprint.
• The median sales price in the region continues climb relative to last year, albeit more slowly than in prior quarters. Several local markets within the CAAR footprint have had declines in the median sales price over the past few quarters.
View the full report published here: CAAR