Mortgage rates for a 30-year fixed-rate home loan sank to an average of 6.60% for the week ending Jan. 18, hitting a low not seen since last spring, according to Freddie Mac. This is a really encouraging development for those that have been on the sidelines waiting to buy a home over the past year. In addition to the dropping interest rates, homebuyers who brave the cold can also enjoy a fresh wave of new listings, which remained in short supply throughout much of last year.

While mortgage rates are not tied directly to the Federal Reserve’s rates, the two often move in tandem. If the Fed continues to keep rates stable as they work toward the goal of 2% target inflation, “a more favorable housing market” may come to fruition. Mortgage demand jumped to a 6-week high last week as interest rates dropped. Additionally, purchase applications increased 4% for the week.

The generally hot spring housing market is about 55 days away, but buyers and sellers might want to make moves now before competition increases dramatically. Many buyers and sellers have been waiting for the right time to jump into the real estate market over the last year and with rates finally moving in the right direction, that influx of activity is likely coming soon. That increased activity will lead to increased competition.

The Bottom Line: We predict buyers are soon going to be hitting the icy pavement to take advantage of the low rates they couldn’t get last year. The “Spring market” might be coming our way right now. Are you ready to jump in and start your home search or home sale? Please reach out. We’re here to help you navigate market conditions smoothly and successfully!