According to the latest figures from the National Association of Realtors (NAR), recent increases in mortgage rates have yet to deter buyers from purchasing a home. Homebuying activity increased last month to the strongest pace since February 2007, though it is expected that the higher rates and rising prices could cause a buying slowdown in 2017.
Limited housing inventory of preexisting homes continue to add pressure on the market driving prices upward. Experts generally agree that six months of supply on the market is considered a healthy level but the current national average is less than four months. This drops even further in some high demand metropolitan areas. San Diego, for instance, has less than 40 days of home inventory.
"We do expect some tapering off of home sales in 2017," according to Lawrence Yun, chief economist for the NAR.
Tight inventory has led to bidding wars over a limited selection of homes for sale causing sellers to increase their prices to match demand. Meanwhile, conforming no-point 30-year fixed rates are averaging 4.25 percent while the 15-year rates are near 3.50 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.