Low Mortgage Rates Entice Buyers – Home Sales at Highest Pace in 9 Years
Near record low mortgage rates have enticed home buyers this spring, sending existing home sales to their fastest pace in nine years. 30 year mortgage rates are averaging 3.73 percent today, about 30 basis points above the all-time record low set three years ago.
The National Association of REALTORS® reported existing home sales are up 1.8 percent month-over-month to a seasonally adjusted annual rate of 5.53 million in May. This is the third consecutive month for gains in existing-home sales. Home sales are now up 4.5 percent from a year ago and are at the highest annual pace since February 2007, at the height of the housing boom.
Mortgage rates are expected to stay near these current low levels for the rest of 2016. Low rates will continue to spur home sales this year. While home sales are strong, the low number of homes available for sale continues to hamper many markets.
The high demand for homes and the low supply of homes available for sale has sent housing prices higher. In fact, the median sales price for all housing types climbed to an all-time high of $239,700 in May. The median sales prices is up 4.7 percent from a year earlier.
Low refinance rates are also enticing homeowners who have a mortgage to refinance their loan. The Mortgage Bankers Association® reported mortgage applications are up 35 percent from a year ago. The refinance share of all mortgage application activity increased to 57.7 percent.
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