What to Expect from California’s Housing Market this Spring?April 13th, 2022 by Administrator
If you plan to purchase or sell a home this spring, you may wonder what is in store for you. Even though there are multiple factors causing uncertainty, including the state of the world’s economy, rising inflation, and the first Federal Reserve rate increase in over three years, the housing market remains relatively stable.
Let’s take a look at what the California real estate market has to offer this spring.
Mortgage Rates are Expected to Rise.
Rates on 30-year fixed mortgages have risen by more than a full point over the past six months. Experts predict rates will keep going up over the next 90 days, despite some minor fluctuations in recent weeks.
Mortgage rates are expected to rise throughout the year as the Federal Reserve raises short-term rates and signals more hikes.
If you’re a first-time purchaser looking to move to a house that better suits your needs, keep in mind that delaying will almost certainly result in an increased mortgage rate. And a higher interest rate increases your monthly payment, which can add up quickly over the term of the loan.
The Supply of Housing will Grow.
Buyers looking for a property may soon be able to breathe a sigh of relief. According to Realtor.com, more homes have been listed than in the prior two months.
The National Association of Realtors (NAR) also reported that the months’ supply of inventories grew for the first time in eight months.
Every spring, existing home listings tend to increase, and it appears there will be more listings in the next 90 days.
If you’ve been disappointed by the lack of available homes for sale, it appears that you may be able to find some respite this spring. If you do find a suitable home, though, be ready to act swiftly.
As a seller, listing now rather than waiting for this additional competition to hit the market is the smart move. With more homes for sale, your bargaining power will be weakened in future discussions.
Home Prices are Expected to Rise.
Housing prices are constantly influenced by supply and demand. Despite the fact that the quantity of properties on the market is growing, buyer desire remains high.
As 5.8 million new homes remain on the market and many millennials are at the age of first-time homebuyers, the housing supply is far behind demand.
So, what does this imply for you? Home prices will tend to rise as demand for homes continues to outpace supply.
Since the rate of appreciation has been high double-digit over the last two years, it is more likely to slow down. This suggests that rates will continue to rise but at a slower rate.
As spring approaches, three things seem to be certain in the housing market:
- Rates on mortgages will continue to increase
- The number of available homes for sale will increase slightly
- Home values will continue to rise but at a slightly slower rate
Now is a good time to buy a home before mortgage rates and housing prices rise any further. If you’re considering selling, your best chance might be to sell quickly to avoid the upcoming rise in competition.
When buying or selling a home in California, make sure you work with a reputable real estate broker.