Eugene Oregon Real Estate Blog

Good Monday Morning!

There has not been much change in the housing market in the Eugene and Springfield area over the past year.  Low inventories of homes for sale and rising home prices have created a challenging market for homebuyers.  This kind of market has also embraced most of the nation.  Here is an article from "Realtor.com" that describes our current national housing market.

The numbers: Existing-home sales declined yet again, a result of the low inventory of properties for sale and rising prices keeping buyers at bay.

Existing-home sales fell 2.7% to a seasonally adjusted annual rate of 5.85 million in April, the National Association of Realtors reported. It was the third consecutive month in which home sales fell. Compared with April 2020, home sales were up nearly 34%, though the year-over-year comparisons are skewed by the onset of the COVID-19 pandemic in the early months of last year.

“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand,” Lawrence Yun, chief economist at the National Association of Realtors, said in the report.

“We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes,” Yun said, adding that the declining number of homes in forbearance would also help matters.

What happened: The Midwest was the only region to see sales growth between March and April, with a 0.8% uptick. The Northeast had the biggest decline, with a 3.9% drop in sales.

The overall decline in sales was caused by a 3.2% drop in single-family home sales — whereas sales of condominiums and co-ops rose 1.4% from March.

The median existing-home price in April was $341,600, a new record high that represents a 19.1% increase from a year before. Properties stayed on the market for 17 days in April on average, and 88% of homes sold last month were on the market for less than a month.

There were signs of improving inventory conditions, though. Unsold inventory was at a 2.4-month supply in April, up from a 2.1-month supply the month before.

The big picture: Most economists argue that one the biggest factors holding back the housing market right now is a lack of inventory. Unfortunately for everyone in the housing market, from home buyers to real-estate agents to mortgage lenders, it could take years to rectify the situation.

A new analysis from title insurer First American Financial Corp. examined the “Great Housing Supply Crash” of the past year — and explained how it was really years in the making.

A lot of Americans who already own homes opted not to sell them this past year, in many cases because of concerns related to the pandemic. As these homeowners start to warm to the idea of selling now that COVID cases are lower and vaccines are readily available, that should reduce some of the pressure.

But it won’t solve everything. “Inventory turnover — the supply of homes for sale nationwide as a percentage of occupied residential inventory — was low even prior to the pandemic, but dropped precipitously last spring,” First American chief economist Mark Fleming wrote in the report. Plus, years of underbuilding mean that America in general doesn’t have enough housing to go around.

To truly get supply and demand back in sync, it “will take years of accelerated new home construction,” Fleming wrote, adding that “an end to the pandemic by itself is unlikely to bring enough sellers to the market to bridge the gap.”

What they’re saying: “Despite still-strong demand for “more house” amid the work-from-home trend, inventories remain extremely lean. Pending home sales have wilted, and new mortgage applications have slowed, suggesting activity has somewhat been capped as home prices surge and mortgage rates creep higher.

“Overall, while the housing market is likely to remain sturdy, we expect momentum to ease by the end of the year,” Priscilla Thiagamoorthy, an economist with BMO Capital Markets, wrote in a research note.

“Even if a bit wary of the conditions they face in today’s market, buyers remain eager, which has resulted in quick home sales and at record prices,” said Danielle Hale, chief economist at Realtor.com.

“Meanwhile, rising seller sentiment could mean some relief is ahead with perhaps even a greater than normal share of homeowners stepping in the market later this year,” she added.

“While it’s not enough to end the shortage of homes for sale, this wave of sellers will make a dent, giving home buyers more options to choose from,” Hale said.

“Fewer than 1 million existing single-family homes are now on the market, less than half the 2 million low at the peak of the boom in 2005. As supply starts to rise, the recent explosive rate of increase in home prices probably will slow,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.

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Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

3220 Crescent Ave #55, Eugene, OR 

Price: $230,000    Beds: 3    Baths: 2.0    Sq Ft: 1829

Beautifully updated home located on the largest lot in Summer Oaks. Open floor plan w/vaulted ceilings & lots of windows throughout. Large kitchen w/ ample storage, island & eating area. Master suite with w/in closet, large bathroom w/ double sinks,...View this property >> 

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Good Monday Morning!

It appears that even though we remain in a "HOT" sellers market in the Eugene and Springfield area, things are starting to get even hotter.  April home sales numbers indicate more home listings, more sales and of course a continuation in the amount of money that homes are selling for.  Mortgage interest rates remain favorable and this of course is fueling the strong housing market here.  The inventory of homes on the market remains extremely low and competitive buying situations remain the rule.  Here are the number for Lane County homes sales in April of 2021.

April Residential Highlights

New listings (523) increased 27.3% from the 411 listed in April 2020, and increased 14.4% from the 457 listed in March 2021.

Pending sales (457) increased 29.1% from the 354 offers accepted in April 2020, and increased 5.3% from the 434 offers accepted in March 2021.

Closed sales (370) increased 16.0% from the 319 closings in April 2020, and decreased 4.9% from the 389 closings in March 2021.

Inventory and Market Time

Inventory increased to 0.7 months in April. Total market time decreased to 25 days.

Year-To-Date Summary

Comparing the first four months of 2021 to the same period in 2020, new listings (1,715) decreased 4.6%, pending sales (1,560) increased 12.0%, and closed sales (1,350) increased 10.6%.

Average and Median Sale Prices

Comparing 2021 to 2020 through April, the average sale price has increased 16.8% from $341,300 to $398,800. In the same comparison, the median sale price has increased 15.3% from $320,000 to $369,000.

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Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

81 Shady Loop, Springfield, OR 

Price: $325,000    Beds: 3    Baths: 2.0    Sq Ft: 1260

Fabulous Hayden Bridge one level home that is move in ready! Several skylights. Make this home light & welcoming. Lots of storage! Fully fenced back yard with play structure and dog run. Kitchen has newer appliances and hot water heater, roof. This ho...View this property >> 

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Good Monday Morning!

Are we currently in the middle of another housing bubble in the United States.  As we watch the price of both existing and new home prices soar, it is hard to believe that we are not experiencing a housing bubble. This is the common thought by most of the public, but the experts seem to feel differently about our current housing market, 

The U.S. housing market is on a hot streak with double-digit annual gains in home prices, bidding wars, and surging buyer demand. That type of soaring housing market is prompting more “bubble” fears in some corners, but economists say the housing market isn’t getting overinflated.

“We have strong conviction that we are not experiencing a bubble in U.S. housing,” Vishwanath Tirupattur, a Morgan Stanley strategist, wrote in a note to clients this week.

Lawrence Yun, chief economist of the National Association of REALTORS®, agrees. He told Axios last month: “This is not a bubble. It is simply lack of supply.”

The rapid rise in prices may be concerning to home shoppers, however. The median selling price for a home is up $35,000 compared to a year ago, which is the fastest-paced increase since 2006, Tirupattur said.

But this isn’t 2006. Housing inventories are low, credit remains tight, and lenders aren’t issuing risky loans at rates like they did back then. Product risk—such as from mortgages with introductory periods, teaser rates, or balloon payments—comprised about 40% of the mortgage market between 2004 to 2006. More recently, those factors are now at only 2% of the mortgage market, according to Morgan Stanley.

Also, the housing market has a record low number of homes available for sale. At the end of March, there were 1.07 million homes available for sale, according to NAR data. For comparison, during the housing bubble, in July 2007, there were more than four times that—4 million homes available for sale.

Still, while home prices won’t keep climbing at the current pace. They aren’t expected to fall either, economists say.

“We are not at all suggesting that home price appreciation will maintain its current torrid pace,” Tirupattur writes. “Home prices will continue to rise, but more gradually.”

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

81 Shady Loop, Springfield, OR 

Price: $325,000    Beds: 3    Baths: 2.0    Sq Ft: 1260

Fabulous Hayden Bridge one level home that is move in ready! Several skylights. Make this home light & welcoming. Lots of storage! Fully fenced back yard with play structure and dog run. Kitchen has newer appliances and hot water heater, roof. This ho...View this property >> 

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Good Monday Morning!

Things are changing quickly with tax laws that could have significant effects on you as a homeowner.  It is time to begin watching closely all of the tax changes that are being proposed.  Some are out front and some are quietly hidden within other proposed legislation.  With all of the increased spending by the Feds, the need for more revenue is going to be huge and taxing homeowners further is coming our way.  Here is an article from "Realtor.com" that talks about what is being proposed that will effect a major function of many Real Estate transactions, 1031 tax deferred exchanges.

President Biden’s new economic plan would eliminate a tax break for many real-estate owners that has enabled them to defer paying capital gains on property sales.

Closing that tax loophole, which has existed since 1921, is part of his $1.9 trillion spending package for new social programs. The current law allows investors to defer paying tax on real-estate gains if they reinvest the proceeds in other properties within six months of the sale.

The deals are known as 1031 exchanges, named for the section in the U.S. tax code. The Biden proposal would abolish 1031 exchanges on real-estate profits of more than $500,000.

In theory, capital-gains tax from these deals eventually gets paid. But on the advice of estate planners, many real-estate investors continue to buy and sell properties this way until they die, passing the capital gains on to their heirs tax-free at death. Mr. Biden seeks to close the death loophole, too, by taxing capital gains on inherited assets.

A U.S. congressional tax committee estimated that the 1031 tax break would save property investors more than $41 billion between 2020 and 2024.

In the plan released by the White House on Wednesday, the Biden administration argued the real-estate loophole is one of many on the books that disproportionately allow the very wealthy to avoid taxation. “Without these changes, billions in capital income would continue to escape taxation entirely,” the administration said.

Mr. Biden’s proposal would also raise the top rate paid on capital gains and dividends to 39.6% from 20%, and it would increase taxes that hedge funds pay on carried interest.

Real-estate investors say that the 1031 tax treatment encourages businesses to expand, creating jobs and pumping more money into the economy, especially during times of lower overall economic activity, such as recessions.

Most 1031 deals are done by individuals, rather than by corporations, according to a report from the Congressional Joint Committee on Taxation. They have been popular with wealthy investors who have pooled money to buy small apartment buildings, motels or other types of less expensive commercial real estate.

They are also favored by privately held commercial real-estate firms. Publicly traded real-estate investment trusts, or REITs, have less need for the exchanges because they enjoy other tax benefits.

Dozens of organizations have registered to lobby the federal government against repealing 1031 exchanges, according to Senate lobbying disclosures, including the American Farm Bureau Federation, the National Association of Realtors and the Asian American Hotel Owners Association.

Sandy Sigal, a Southern California-based owner of shopping malls, oversees a $2 billion real-estate portfolio. Over the course of his 35-year career, he said he has completed about 50 exchanges, which have given him more cash on hand to grow his business.

He sold a shopping center in Baldwin Park, Calif., last year, then reinvested the proceeds by buying and redeveloping another shopping center. He said that during difficult times like the pandemic these tax exchanges helped him generate more business and hire more workers than he would have otherwise.

“Would we have done that without [a 1031 exchange]? No, we would have held on to the cash,” Mr. Sigal said.

An entire cottage industry of brokers and advisers also exists to facilitate these niche transactions, who would also be threatened by a change in the law. The obscure line in the tax code even has its own lobbying group, the Federation of Exchange Accommodators.

“Section 1031 encourages real-estate transactional activity, and in doing so, is a powerful stimulator of the U.S. economy,” said Suzanne Baker, a co-chair of the group, which opposes the Biden proposal.

The tax treatment also applies to residential sales, enabling home sellers to defer capital gains by reinvesting sales proceeds in a home other than their primary residence. The Biden proposal would continue to allow 1031 exchanges of less than $500,000, meaning many homeowners and smaller investors could still take advantage.

Originally, the exchanges applied to other forms of personal property, such as artwork or machinery. Those property types were eliminated by Congress and President Trump in 2017, in an effort to offset the other large tax cuts they enacted. Real-estate exchanges were preserved.

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THIS WEEKS HOT HOME LISTING!

485 SW Juniper St, Junction City, OR 

Price: $315,000    Beds: 3    Baths: 1.0    Sq Ft: 1066

Don't miss this darling updated & move-in ready home in a great Junction City neighborhood. New kitchen cabinetry, fresh interior paint, new doors & trim, vinyl windows & a ductless HP. Beautiful landscaping in the front & back w/ a covered patio pe...View this property >> 

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Good Monday Morning!

As mortgage interest rates fall again, the housing market in the Eugene and Springfield area is heating up even more.  The shortage of homes on the market for sale is not discouraging home buyers as they are making offers on homes for sale causing bidding wars in most cases.  The inventory is the lowest in the first time buyer prices ranges of $250,000 to $400,000. This of course is the price range where competiition is the greatest.  I would not look for any change in the market conditions here in the near future.  The following is an article from"Realtor.com" that talks about the recent market and mortgage interest rates.

The spring housing market is heating up faster than the temperature.

Already-high home prices continued to climb to yet new heights as mortgage interest rates dipped below 3%. Median home sale prices soared 17.2% year over year in March, to hit a record high of $329,100, according to the National Association of Realtors®. This was for existing homes and did not include new construction. Sale prices of single-family homes were even higher, jumping 18.4% annually in March, to reach $334,500.

This comes as buyers have flooded the market and found a severe shortage of properties for sale. Sellers have been hesitant to list during the pandemic, and builders haven’t been able to keep up with demand. The imbalance has led to offers well over asking price, frenzied bidding wars, and the waiving of all sorts of contingencies.

Median list prices, which is what the sellers are asking for homes, not what they sell for, also shot up 17.2% on Realtor.com in the week ending April 17.

One the big reasons for the meteoric rise in prices has been low mortgage rates. The lower the rates, the lower the buyer’s monthly mortgage payment. This has enabled many buyers to afford more expensive homes without having to shell out more for them every month.

“Today’s mortgage rates give home buyers a much needed boost in purchasing power that will help them navigate higher home prices, which nearly every housing market across the country is seeing right now,” says Realtor.com® Chief Economist Danielle Hale.

Rates fell well below 3% for the first time during the coronavirus pandemic. They rose above the 3% threshold only in March, but they’ve since come back down a little. They dipped to an average 2.97% for a 30-year fixed-rate loan in the week ending April 22, according to Freddie Mac.

“Going forward, there will be no shortage of buyer interest in housing, and we’ll still see climbing mortgage rates,” says Hale

“But I expect the increases to be more gradual, which will make it easier for buyers to adjust to higher monthly payments. The top challenge for buyers will still be finding a home, but even that should get a bit easier as we see a seasonal ramp-up in sellers.”

The lower rates have also been a boon for homeowners who refinance their mortgages to capitalize on the lower rates. 

“Low and declining mortgage rates provide [lower-income] homeowners the opportunity to reduce their monthly payment and improve their financial position,” Freddie Mac Chief Economist Sam Khater said in a statement.

However, the high prices, coupled with a dearth of homes on the market, coupled with the high price tags, is hurting the number of sales. Closed transactions dropped 3.7% in March compared with February on existing homes, according to NAR. However, sales were 12.3% higher than a year ago, at the start of the pandemic when many buyers were not allowed to visit properties in certain parts of the country.

The number of homes for sale was just 1.07 million units in March—a 28.2% plunge from the previous year. And they sold quickly, at a median 18 days. Roughly 83% of homes were sold in less than a month.

“The sales for March would have been measurably higher, had there been more inventory,” NAR’s Chief Economist Lawrence Yun said in a statement. “Without an increase in supply, the society wealth division will widen with homeowners enjoying sizable equity gains while renters will struggle to become homeowners.”

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

THIS WEEKS HOT HOME LISTING!

2924 Norkenzie Rd, Eugene, OR 

Price: $485,000    Beds: 3    Baths: 2.0    Sq Ft: 1693

Don't miss this tastefully updated one level home nestled in a quiet North Gilham neighborhood. Stunning kitchen w/ granite countertops, soft-close cabinetry, stainless steel appliances, breakfast bar & large windows looking to the private backyard...View this property >> 

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Good Monday Morning!

The first quarter of 2021 is behind us now.  What we saw during the first quarter in regards to home sales in the Eugene and Springfield area is a continuation of the same housing market that we had last year.  Our inventory of homes for sale is at an all time low, .06 months.  We have extremely high homebuyer demand and very low mortgage interest rates.  This is continuing to fuel home value inflation, bidding wars on homes for sale and an extremely attractive sellers market.  Here are the home sales numbers for Lane County in March of 2021.

March Residential Highlights

New listings (457) decreased 18.0% from the 557 listed in March 2020, and increased 29.8% from the 352 listed in February 2021.

Pending sales (434) increased 16.0% from the 374 offers accepted in March 2020, and increased 21.9% from the 356 offers accepted in February 2021.

Closed sales (389) increased 14.1% from the 341 closings in March 2020, and increased 44.1% from the 270 closings in February 2021.

Inventory and Market Time

Inventory decreased to 0.6 months in March. Total market time decreased to 31 days.

Year-To-Date Summary

Comparing the first three months of 2021 to the same period in 2020, new listings (1,171) decreased 15.2%, pending sales (1,109) increased 4.5%, and closed sales (965) increased 8.8%.

Average and Median Sale Prices

Comparing 2021 to 2020 through March, the average sale price has increased 17.8% from $335,700 to $395,600. In the same comparison, the median sale price has increased 15.9% from $315,000 to $365,000.

Have An Awesome Week!

Stay Healthy! Stay Safe! Trust in God!

THIS WEEKS HOT HOME LISTING!

2924 Norkenzie Rd, Eugene, OR 

Price: $485,000    Beds: 3    Baths: 2.0    Sq Ft: 1693

Don't miss this tastefully updated one level home nestled in a quiet North Gilham neighborhood. Stunning kitchen w/ granite countertops, soft-close cabinetry, stainless steel appliances, breakfast bar & large windows looking to the private backyard...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

I am often asked about owning Real Estate as an investment.  Is it better to purchase than to rent?  Is Real Estate a better investment over time than stocks?

The answer I always give is that Real Estate markets, like the stock market have ups and downs.  Depending upon when you buy or sell the amount of gain on or loss on your investment can vary.  If you look over the long term, the last 25 years, it is clear that owning Real Estate is a solid investment.  In fact, Real Estate has never gone backwards over the long haul.  So, my answer is always a big "YES"!  Owning Real Estate is a solid investment.  The following is an article from "Realtor.com" that speaks to Real Estate as an investment.

Which is the better investment, owning a home or owning stocks? If you ask most Americans, chances are they prefer the former.

A new study from the Federal Reserve Bank of New York examined consumer preferences toward being a homeowner and how their attitudes have changed over the course of the COVID-19 pandemic. Survey participants were asked to rate which was the better investment — a home or financial assets such as a stocks — and what factors contributed to their choice.

The study found that over 90% of respondents preferred owning their primary residence rather than investing in the stock market. A majority of survey-takers also favored the idea of being a landlord to purchasing stocks, with more than 50% of the participating households preferring to own a rental property.

The most common reasons people cited in choosing housing over stocks seemed to be about comfort and stability, rather than seeking a better return. The most commonly-selected responses were that the home was their “desired living environment” and “provides stability” and that house prices were “less volatile.”

Research has shown that residential real-estate has acted as a strong hedge in most bear markets, with the notable exception of the Great Recession. The early days of the pandemic is a prime example: The S&P 500 index lost over 20% in the first quarter, while the Case-Shiller National Home Price Index increased 1.4%. That stock market has, of course, recovered since then.

That said, Americans were more likely to cite higher housing returns in 2021 than in the year prior, likely a reflection of the incredibly fast pace of home price appreciation nationwide.

But people’s attitudes toward the housing market have shifted over the course of the pandemic, the researchers found. “The preference for housing dipped in October 2020 and returned back to the pre-COVID level by February 2021,” the study’s authors noted.

That shift in preferences away from housing wasn’t driven by concerns about home prices. Some Americans expressed more concern about the risk of vacant rental units, while concerns about being able to make mortgage payments may have had an effect on people’s predilection toward homeownership.

People’s inclination toward owning a home may also be a reflection of their gender or education. Women were more likely to prefer housing than men, and non-college graduates opted for homeownership more often than those with college diplomas.

Have An Awesome Week!

Stay Healthy! Stay Safe! Trust in God!

THIS WEEKS HOT HOME LISTING!

2918 San Pedro Ave NW, Albany, OR 

Price: $429,900    Beds: 5    Baths: 3.0    Sq Ft: 2570

Fantastic Views of Nearby Hills. This beautiful home offers spacious rooms with an open floorplan and tall ceilings. It has a large master bedroom with 2 walk in closets, and a soaking tub. You can sit in the backyard and enjoy the fantastic vi...View this property >> 

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Good Monday Morning!

Home prices in the Eugene and Springfield area continue to rise at a historic pace. Double digit home value increases have been the norm over the past several years, driving the average area home price above $390,000.  Extremely low mortgage interest rates have been the force behind the home price explosion along with an etremely low inventory of homes on the market for sale.  The increased home values in our area have driven many buyers completely out of the market and made home purchases difficut for others.  Will this trend continue? Here is an article from "Realtor.com" that describes home prices nationally.

The numbers: Home prices continue to increase at an incredibly fast pace across the country, according to two separate indices released Tuesday, adding to the financial pressures home buyers face amid rising mortgage rates.

The S&P CoreLogic Case-Shiller 20-city price index posted an 11.1% year-over-year gain in January, up from 10.2% the previous month. The separate and broader S&P Corelogic Case-Shiller national price index, which covers the entire country, demonstrated an 11.2% gain year-over-year in January, representing the highest gain in nearly 15 years.

On a monthly basis, the 20-city index increased 0.9% between December and January.

What happened: Prices rose on a monthly basis in 19 of the 20 large cities tracked by Case-Shiller, with Cleveland being the only city to see prices drop. Compared to January 2020, prices were up in all 20 cities the report tracks.

Notably, the index included data for Detroit for the first time in almost a year. Typically included as part of the 20-city index, Detroit was excluded throughout most of the pandemic until now because of issues collecting data during coronavirus-related shutdowns.

Phoenix saw the highest rate of price appreciation with a 15.8% gain year-over-year, according to the Case-Shiller indices, followed by Seattle and San Diego.

“January’s data remain consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI, in the report. This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years.

Separately, the Federal Housing Finance Agency released its own home-price index Tuesday, which showed a 12% increase in home prices nationwide compared to a year ago and a 1% uptick month-over-month.

While still a break-neck pace of price appreciation, FHFA deputy director of the division of research and statistics Lynn Fisher noted the monthly increase was the smallest since June. “While house prices experienced historic growth rates in 2020 and into the New Year, the monthly gains appear to be moderating,” Fisher said in the report.

Prices rose the most in the Mountain region, according to the FHFA, in line with the regional data reported in the Case-Shiller indices.

The big picture: The pandemic prompted a rush into the housing market. Cramped households eagerly sought out larger homes with more outdoor space further out in the suburbs and rural areas, while the rise of remote work also led to a need for more room. Plus, millennials are reaching their prime home-buying years.

These buyers have encountered little supply of homes for sale, creating an incredibly competitive and stressful market. Until now, that’s caused home prices to rise quickly, but that could soon change.

“We expect time on market and price gains to moderate as we approach spring and more sellers put homes up for sale, but potential buyers will face new challenges later in the year,” said Danielle Hale, chief economist at Realtor.com.

Chief among those challenges is the recent increase in mortgage rates. So this year, mortgage rates have risen over half a percentage point, and mortgage rates jumped above the 3% for the first time since last summer earlier this month. Higher interest rates mean higher housings costs for home buyers, naturally.

As a result, some home buyers will be forced either to lower their budget for the property they wish to purchase or exit the market entirely if owning a home simply isn’t within their means anymore. That could put some pressure on home prices, causing the rate of home price appreciation to slow later this year.

What they’re saying: “The housing market momentum that had picked up pace at the end of 2020 spilled over into the early months of 2021, upending the traditionally slow home-buying season,” CoreLogic deputy chief economist Selma Hepp said ahead of the Case-Shiller report’s release.

“Housing has remained robust during the pandemic amid low interest rates and dwindling supply,” Priscilla Thiagamoorthy, an economist with BMO Capital Markets, wrote in a research note.

Have An Awesome Week!

Stay Healthy! Stay Safe! Trust in God!

THIS WEEKS HOT HOME LISTING!

2918 San Pedro Ave NW, Albany, OR 

Price: $429,900    Beds: 5    Baths: 3.0    Sq Ft: 2570

Fantastic Views of Nearby Hills. This beautiful home offers spacious rooms with an open floorplan and tall ceilings. It has a large master bedroom with 2 walk in closets, and a soaking tub. You can sit in the backyard and enjoy the fantastic vi...View this property >> 

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

As mortgage rates tick up, demand for housing has not slacked off.  The inventory of homes for sale in the Eugene and Springfield area is at a historic low and currently no end to this situation is in sight.  Housing demand far outweighs supply, even as mortgage rates have increased.  The question now is, will the trend of low housing inventory continue with the higher mortgage rates as the potential for decreased buyer demand rises?  This article from "Realtor.com" talks about this issue nationally.

Mortgage rates have jumped to the highest point in over half a year as investors grow more optimistic about the state of the economy. And that’s bad news for some home buyers.

The 30-year fixed-rate mortgage averaged 3.17% for the week ending March 25, up eight basis points from the previous week, Freddie Mac reported Thursday. It’s the highest level the 30-year mortgage has reached since June of last year.

The 15-year fixed-rate mortgage, meanwhile, rose five basis points to an average of 2.45%. The 5-year Treasury-indexed adjustable-rate mortgage averaged 2.84%, up 22 five points from the previous week.

So far in 2021, mortgage rates have risen over half a percentage point. Mortgage rates rose above the 3% for the first time since last summer earlier this month. Rising mortgage rates are a reflection of the upbeat sentiment among investors, which has pushed long-term bond yields higher, including the 10-year Treasury.

“Rising expectations around the boost to economic activity from a fresh round of fiscal stimulus, equal to more than one month’s worth of economic output, and reemerging consumers drove rates higher,” said Danielle Hale, chief economist at Realtor.com.

(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)

Higher mortgage rates have yet to dampen demand among home buyers. The volume of mortgage applications for loans used to purchase homes has increased for four consecutive weeks, according to data released Wednesday by the Mortgage Bankers Association.

Desperate for more space

As people continue to work from home, many families are in desperate need of more space, causing them to pursue buying larger homes. At the same time, millennials have reached their peak home-buying years. As more young couples move in together and get married, that’s increase homeownership demand.

But the number of homes for sale has not kept up with demand. Many sellers have opted against listing their homes for sale amid the coronavirus pandemic. Plus, years of under-building of new homes following the Great Recession has led to a supply-demand imbalance in the housing market.

Home builders are working feverishly to construct new homes, but rising material costs could become an issue. Overall, it’s a recipe for higher prices. Median listing prices were up 15.6% from a year ago as of Thursday, according to a new report from Realtor.com.

“As both home-price growth and mortgage rates continue this upward trend, we may see affordability challenges become more severe if new and existing supply does not significantly pick up,” Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association, said in the organization’s application report.

The spring home-buying season is here, which means more buyers streaming into the market and more competition for homes. But buyers might see some relief in coming weeks, at least when it comes to mortgage rates.

“Concerns about a possible new wave of COVID in Europe and what that might mean for cases in the U.S. could foreshadow a pause in rate increases — even if brief — in the weeks ahead,” Hale said.

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Good Monday Morning!

Yes, mortgage interest rates are on the rise.  This could just be a temprary blip or it could be the start of a change in rates that will lead to higher mortgage rates on a long term basis.  If this change is not short term, the increase will begin putting pressure on homes pricing that has been on a steady upwards trajectory for a long period of time.  If you are considering selling your home?  Don't wait! Higher rates may certainly mean less money for your home. Here is an article from  "Realtor.com" that talks about the current mortgage interest rate situation

The Federal Reserve is planning to stay the course in keeping interest rates low — but that isn’t necessarily music to home buyers’ ears.

On Wednesday, the Federal Reserve signaled that it won’t raise interest rates until 2023 at the earliest, even though some observers have voiced concerns about rising inflation. As of now, seven of the 18 Fed officials expect a rate hike to come in 2023, while four think one could happen next year.

Investors happily greeted the news, with the Dow Jones Industrial Average and the S&P 500 both notching intraday records Wednesday following the Fed’s announcement. Whether the Fed’s policy is similarly auspicious for home buyers or people looking to refinance their existing mortgages remains to be seen.

Since the start of the year, the benchmark rate on the 30-year fixed-rate mortgage has risen more than 40 basis points, according to data from Freddie Mac.

As of Thursday, the 30-year fixed-rate mortgage averaged 3.09%, up four basis points from the week earlier, Freddie Mac reported. It’s the highest level that the benchmark mortgage rate has hit since June of last year.

Meanwhile, the average rates on the 15-year fixed-rate mortgage and the 5-year Treasury-indexed adjustable-rate mortgage both increased by two basis points, to 2.4% and 2.79% respectively.

“The Fed funds rate itself has no impact on mortgage rates,” said Tendayi Kapfidze, chief economist at LendingTree, in explaining the Fed’s policy decision didn’t stem the rise in mortgage rates this week.

The Federal Reserve controls short-term interest rates. But mortgage rates are long term rates, and mortgage lenders take their cues from the bond market when setting the rates they charge to borrowers.

In particular, mortgage rates roughly track the direction of the 10-year Treasury. But even that relationship isn’t foolproof. “This relationship can vary,” Kapfidze said. “Ten-year Treasury rates were on an upward trend from August 2020, but mortgage rates were still falling until February.”

Mortgage rates have risen quickly in recent weeks, reaching the highest level since July, as investors grew increasingly concerned about inflation. With Americans now receiving the stimulus checks approved as part of the $1.9 trillion American Rescue Plan, some analysts expect people to rush out and spend that money, causing prices to go up for consumer goods and services.

Still, the Fed’s stance and policy decisions could have some influence on mortgage rates, even if the central bank doesn’t control them directly. Since the start of the pandemic, the Federal Reserve has ramped up its purchases of mortgage-backed securities in an effort to pump much needed liquidity into the market. Those purchases helped to push rates lower.

“Reaffirming its commitment to ongoing asset purchases while acknowledging that a tapering is on the horizon at some point — likely, pretty far off — should help slow the rise of mortgage rates,” said Danielle Hale, chief economist at Realtor.com. Hale noted that she expects the overall upward trend in mortgage rates to continue.

But if the Fed reverses its policy regarding mortgage-backed securities, rates could quickly rise as lenders face liquidity constraints. Alternatively, if the Fed were to opt to ramp up its purchases of 10-year Treasury notes to stem long-term rates, then mortgage rates could drop, Kapfidze said.

Either way, mortgage rates remain very low by historical standards even if they’re now above the 3% mark, and industry experts anticipate that demand for mortgages will remain strong.

The Mortgage Bankers Association “continues to see a very strong housing market, with mortgage applications to buy a home increasing, even as refinance demand wanes,” said Mike Fratantoni, the trade organization’s chief economist. “While mortgage rates are likely to move somewhat higher, the purchase market remains on track for a record year.”

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Stay Healthy! Stay Safe! Trust in God!

THIS WEEKS HOT HOME LISTING!

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