The spring buying season may already be upon as, with reports suggesting that demand for housing is picking up earlier than expected. Analysts say lower mortgage rates could be the reason.
For example, CNBC reported the case of an open house in Coppell, Texas, a suburb of Dallas, where dozens of prospective buyers were lined up at the doorstep all waiting to get in and take a look around.
“It kind of caught us a little bit off-guard,” Laura Barnett, a real estate professional with RE/MAX DFW Associates in the Dallas area, told CNBC about the sudden uptick in buyer demand. “We actually did get a surge of buyers coming in. And, matter of fact, I worked with two this weekend, one of which is under contract; another is about to be.”
Home sales slowed at the end of last year due to increases in the 30-year fixed rate mortgage that saw rates approach 5 percent by the end of 2018. However, interest rates have moderated in recent weeks with the 30-year fixed rate mortgage averaging just 4.46 percent at the end of January, according to Freddie Mac.
In addition, home price growth is also slowing down. In December, prices rose by 4.7 percent compared to the same period a year ago, representing the smallest gain in over six years, according to CoreLogic data.
“When you see those numbers coming down, you want to go, ‘OK, this is the time to buy,’” Celena Vittorio, a home shopper in the Dallas area, told CNBC. “You certainly don’t want to buy at the top of the market.”
Also tempting buyers is the fact that the share of homes with price cuts rose last month. According to an analysis from Realtor.com, the share of price reductions increased in 39 of the U.S.’s top 50 markets, with the most expensive seeing the largest cuts.
The cities with some of the largest reductions in list prices were in Las Vegas (up 16 percent); San Jose, Calif. (up 9 percent); Seattle (up 8 percent); Orlando, Fla. (up 6 percent); and Phoenix (up 5 percent).
Real estate pros are responding to the increase in traffic by trying to get the homes that were going to wait to list until the spring ready to go to the market earlier.
Buyers are taking advantage of the price reductions and lower mortgage rates. “We don’t want to miss that opportunity, so we’re trying to get busy with our listings and start getting our listings on the market early,” Barnett told CNBC.