What’s Driving Today’s High Buyer Demand?

Published:
March 17, 2022
Last updated:
May 4, 2022
In This Article

What's Driving Today's High Buyer Demand

It’s a hot seller’s market in the Pacific Northwest, and has been for quite some time. Buyer demand continues to be very strong, which has helped keep home prices soaring in many centers throughout Washington, Oregon, Idaho, and Colorado.

But what exactly is behind the ongoing buyer demand?

The following infographic outlines a few key factors that are contributing to this trend.

What’s Driving Today’s High Buyer Demand?

There’s an influx of buyers looking for homes today, and that means your house is in high demand. Here are a few reasons why there are so many people looking to buy a home.

Buyers are motivated to beat rising mortgage rates

“Homebuyers this year have remained in the market to take advantage of current rates before they increase further.”

– George Ratiu, Manager of Economic Research, Realtor.com

Mortgage interest rates have remained relatively low over the past few years, making homebuying more affordable for buyers. Even a 1% dip in mortgage rates can make a big difference in the cost of a mortgage over its term.

As of this writing, mortgage rates for a 30-year fixed-rate mortgage sit at 3.89%, which is relatively low.

That said, mortgage rates have been creeping up over the past year. At the same time in 2021, the rate was 2.97%. We’re almost 1% higher than that right now. And according to industry experts, rates are expected to continue on this ascent.

Given the fact that mortgage rates are on the rise, buyers may be rushing into the market to take advantage of today’s relatively low rates before they rise even more. As mentioned, even a small difference in the rate locked in can make a big difference in how much interest is paid over the long run.

The sooner buyers get into the market, the sooner they can lock in at a lower rate than where rates might be in the near future.

Today’s Mortgage Rates

Millennials are reaching peak homebuying age

“The strength of the housing market is not surprising given the ongoing wave of millennial demand…”

– Mark Fleming, Chief Economist, First American

Millennials are becoming more financially stable as they get older. Considering the fact that millennials make up the largest group of homebuyers in the country, this demographic plays a significant role in the real estate market.

According to First American Financial, potential buyer demand has increased 3.5% year-over-year. That’s more than any other generation. The oldest millennials turned 40 last year, which means they’ve reached the peak age of homebuying.

Millennials may not have been able to afford a home purchase a decade or more earlier, but their stronger financial positions today make them better able to buy a home, even with home prices soaring. And with the continued housing shortage we’re experiencing, there simply are not enough homes available to accommodate this demand.

Buyers want to escape rising rents

“With tents already at a high and expected to keep going up, rental affordability will increasingly challenge many Americans in 2022. For those thinking about making the transition from renting to buying their first home, rising rents will remain a motivating factor…”

– Danielle Hale, Chief Economist, Realtor.com

Traditionally, one of the more common reasons to rent is to avoid the costs of mortgages. But over recent years, the cost of rent has been soaring.

More specifically, rental prices have increased by an average of over 4% over the past year, which is more than the 3.3% average yearly increase that took place over the 5-year period before the recent health crisis hit, according to the Bureau of Labor Statistics.

Experts agree that rent is likely to continue on this rapid upward trajectory. Given this, homebuyer hopefuls may want to switch to homeownership to avoid the rent price trap that is making it less affordable to rent.

If you’re thinking about selling your house, today’s demand is great news. Let’s connect to begin the process of listing your home while buyers are ready to purchase.

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Ready to Apply For a Mortgage?

Do you have questions about mortgage rates this week and home loans? Or are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.

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