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Existing home sales increased in January from the month before, pointing to strength in the housing market, according to the National Association of Realtors (NAR).
Overall sales increased year-over-year, up 0.6% from the same time in January 2020.
Sales recovery is strong as buyers who were waiting throughout the pandemic to buy finally come out of the woodworks to make a purchase. This increase in buyer confidence appears to be sustainable for the foreseeable future as long as mortgage interest rates stay very low and employment gains carry on.
Buyers are likely influenced by declining mortgage rates. Analysts expect that rates will remain very low throughout 2021, giving buyers incentive to get into the market over the coming months.
The national median home price rose by 14.1 percent annually to $303,900, according to NAR.
While this news paints a rosy picture for housing markets, challenges remain. Strict mortgage standards are an obstacle for the first time and moderate-income buyers as well as for buyers with less than stellar credit scores.
While construction of new homes is increasing, it still may not be enough to meet demand. By the end of January, total housing inventory totaled 1.04 million units, a 1.09% decrease from December, and a decrease of 25.7% from the same time in 2020. Unsold inventory currently sits at a 1.9-month supply at today’s average sales pace, down from 3.1 months in January 2020.
The Federal Housing Finance Agency (FHFA) reported that home prices associated with mortgage loans owned or backed by Fannie Mae and Freddie Mac were up 1.1% in January from December 2020’s reading and up 10.8% year-over-year.
Home prices across the nation recorded the largest yearly and quarterly rise in the FHFA’s index’s history.
If you have questions about mortgages, Sammamish Mortgage would love to help. We are a local, family-owned company based in Bellevue, Washington and currently lend in all of Washington, Oregon, Idaho and Colorado. We offer several mortgage programs to choose from, and have been since 1992. Please contact us if you have mortgage-related questions.
You may be able to get rid of that expensive mortgage insurance without refinancing if your loan is in good standing, and it was opened before June 2013, among other requirements.