Last week I looked at how the current problems for stock markets are benefiting home buyers and sellers with a resulting steady fall in average mortgage rates ever since the start of 2016.
CNBC is today reporting that there was a 9.3% increase in new mortgages last week, not altogether surprising given the consistent downward rate trend we've been seeing of late.
That impressive figure undoubtedly includes many remortgages as borrowers are, quite rightly, more tempted to refinance. But it also reflects what we're seeing in a wider context of incredible buyer sentiment just now.
While still a great time to sell or buy, the winter months are always a slower period in the real estate calendar. But, across the nation, that trend has been bucked to some extent this winter, most notably due to buyers recognizing that, with such cheap borrowing, there really is no time like right now to get on the housing ladder or move home. Indeed it would be no exaggeration to say that we are currently in a golden era of buyer sentiment, with a very positive US economy helping to drive confidence, not least last week's announcement of the lowest unemployment figures in eight years. Although news in worldwide financial markets is less encouraging, the retreat by investors into safe haven bonds is very welcome for most home purchasers, as it inevitably means cheaper home loans.
This happy situation was widely anticipated by many industry commentators last year, with predictions of the best real estate market for a decade. What no one was expecting, however, was that mortgage rates would start the year constantly in reverse gear. Last week was the fifth straight week when rates fell, and there is no reason so far to suggest that this week will be any different.
The key motivation for buyer sentiment at present is really quite simple - lock in a low mortgage rate while you still can. In my conclusion to last week's blog, I suggested that a waiting game for even lower rates is a high risk strategy as rates have to rise eventually and maybe that will happen quite suddenly.
Looking more locally, our unique market dynamics in this area mean that we are seeing some of the nation's biggest percentage year on year increases in property values, adding yet further buyer incentives to act now. With all the incredible developments ahead of us, including the new Apple Campus and proposed Vallco Shopping Mall redevelopment in Cupertino, plus the ever growing prosperity in the tech sector, purchasing today can result in almost instantaneous investment returns, with the distinct prospect of even better future returns.
Buyers are also acutely aware that renting is getting more and more expensive so, with such cheap borrowing, there is also an increasing focus on the many advantages of home ownership. My advice would be if you can afford to, get on the home ownership ladder right now. There has rarely, if ever, been a more attractive opportunity.
Any on the fence sellers really need to ask themselves if this is an opportunity they can afford to miss. Listing right now means that you can tap into the biggest pool of potential buyers for a very long time.
Don't waste another moment. Call us today for the best buying and/or selling advice in your individual circumstances.Dominic Nicoli