Mortgage rates rose further last week as the latest macroeconomic report shows that the U.S....
Here's a look at the the market action for February. Statewide, after a dip in rates spurred a boost to housing in January, the recent increase back above 7% demonstrates that the rebound will be bumpy as pending sales cooled.
All signs indicate that buyers have begun to adjust to more normal rates than we enjoyed during the pandemic as several key indicators of market competitiveness describe a market that is heating up as the Spring homebuying season approaches.
Still, other trends show that homebuyer demand remains more depressed than it should be and buyers would do well to consider the long-term benefits of homeownership (which are well documented) alongside their short-run concerns about the market.
Locally, the Modesto market showed less homes available than the previous few months, but heated up in total sales for the month of February (happy to contribute to this stat as I purchased a condo in February!).
While the total number of homes available was down, the total number of home sales was up for the first time in months (see chart below). This boost in sales helped improve the months-of-inventory number to reach a quarterly low of 1.3.*
Viewing the home price distribution metrics, we see that the number of homes available between $300k - $500k and $500k - $800k has evened out compared to previous months. The lower price point usually has about 10% - 15% increase in available homes. This “evening out” indicates that homes at the lower price points were popular during the month of February (perhaps a precursor of things to come in the spring home buying season).
*Months of Inventory is defined as the amount of time (in months) it would take to sell all house currently available if no further houses were added. For example, a figure of 1.8 indicates it would take 1.8 months to see all current inventory.
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Ed Justen -DRE: 02221512 - Affiliated with Keller Williams. Portions of this blog post created via artificial intelligence and lightly edited by the post author. All information presented here sourced from publicly available websites .