Not to beat a dead horse here or anything, but you should know by now that mortgage rates are crazy low. They’re not at record lows like they were last month, but they are still insanely low given how high they were last year at this time. Combine low mortgage rates with home affordability being slightly lower than the record set last quarter, and you’ll be surprised with some of the numbers you can find.
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If you tried to purchase a home in 2013, you’re probably familiar with the bidding wars that ensued in many markets. But trends are starting to show that that won’t be the case for 2014’s prominent home buying season (the spring and summer months). That’s because buyers will have a bigger supply of inventory to choose from and therefore, more leverage when it comes to price. Yes, compared to historical standards on a national level inventory remains relatively low, but it’s up by 11.1% since January 2013, which is something worth noting.
So how was this determination made? Markets that were previously short in supply, like Las Vegas, Phoenix and Sacramento, saw rapid rates of price appreciation and the largest amount of additions to their for sale inventory. Las Vegas saw the greatest year-over-year growth in available supply (a jump of 42.8% from January 2013). Phoenix’s inventory increased by 30.5% and Sacramento’s grew by 26%.
According to the latest Home Value Index from Zillow, U.S. property prices climbed 0.2% from December to January, the slowest rate of appreciation seen in 18 months, largely due to inventory increases in 22 of the 35 major metro markets highlighted in the report.
“Last year tight inventory contributed to very rapid home value appreciation,” said Stan Humphries, Zillow’s chief economist. “Now, more inventory is helping to moderate home value increases in many areas. This increased supply is coming from many sources, as more sellers are free to list their homes after being released from negative equity, builders continue to ramp up construction and many homeowners decide to list their homes and capitalize on recent gains.”
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