OC HOUSING REPORT: A Jump in Demand
AFTER TOPPING 7.5% IN APRIL, MORTGAGE RATES HAVE DECLINED TO THE LOW SIXES AND HAVE REMAINED THERE WITH DURATION, PAVING THE WAY FOR AN UNCHARACTERISTIC LATE SEPTEMBER RISE IN DEMAND.
LOWER RATES IMPACT DEMAND
Demand jumped by 10% in the past couple of weeks.
Everyone is always looking for a good deal. With Thanksgiving around the corner, many holiday shoppers will look to Black Friday and Cyber Monday for deep discount savings. Inevitably, in the early morning hours on the day after Thanksgiving, a long line of eager customers will arrive hours before stores open their doors. With the cost of living increases since the pandemic, consumers are looking for huge savings, especially on high-ticket items.
Mortgage rates have been stubbornly high this year. For most of 2024, they have remained above 7%, even topping 7.5% several times in April. They have been falling ever since, dropping below 7% in July and below 6.5% at the end of August. Now that interest rates have been dancing in the low sixes for several weeks, it is as if the entire housing industry suddenly went on sale with deep discounts. Buyers who had paused their hunt for a home are coming off the sidelines and reviving their search. Just as consumers look for deals on Black Friday and Cyber Monday, buyers are looking to cash in on favorable rates and significant improvements in affordability.
Ever since the Federal Reserve raised the short-term Federal Funds rate substantially a couple of years ago, rates climbed during the Autumn Market and hit their annual heights, reaching 7.37% in 2022 and eclipsing 8% in 2023. Affordability eroded, and demand slowed. But not this year. Rates recently dropped to their lowest level since February 2023, a considerable improvement from 7.5% just five months ago. They have persisted at these lower levels for several weeks now. This has resulted in a jump in demand and a noticeable drop in the Expected Market Time.
Mortgage rates are currently at 6.21%. For a $1 million home purchase with 20% down, the monthly payment would be $4,905. That is much better than last year’s 7.61% rate…
CONTACT KASIA FOR MORE INFO
Kasia Andrzejuk
(630) 569-5299
kasia@kasia99realtor.com
DRE 02124221
