If you are a real estate agent and are wondering when your buyers will have some reprieve, read on!

But first, I have the same rhetoric for you, low inventory & high demand.

In the past 30 days inventory has fallen even lower and demand has risen even higher. Ugh, our poor buyer clients.

So are there new buyers in the market or are buyers continuing their search from the end of 2020?

Answer: New buyers have entered the market in January 2021.

In January there was a spike in mortgage applications. The spike in applications was the biggest spike we’ve seen since the first April 2020 rate cut boom. A spike in mortgage applications mean new serious buyers hitting market ready to shop.

2 Year Trend of Mortgage Applications

source: tradingeconomics.com

So what is driving the mortgage application spike?

Answer: A big driver is Lower Interest rates.

Interest rates fell to the lowest we have seen in over 50 years at the end of 2020 bottoming out around ~2.8% for a 30 year fixed. 15 year fixed was even lower. Another factor driving new applications may be a FOMO of missing out on the rates. Some financial analysts are predicting a volatile swing in rates with a rate increase to end 2021. .

2 Year Trend of Interest Rates

source: tradingeconomics.com

So when will my buyer clients see a reprieve?

Answer: Follow Mortgage Rates, The Mortgage Application Trend & the New Listings Trend

January Mortgage Applications:

source: tradingeconomics.com

Weeks 3 & 4 for January have seen mortgage applications drop. Unfortunately this is not enough reprieve for buyers.

Keep watching the weekly Mortgage Rates & Mortgage Application Rates. If we see a total decline of applications over -10% in 30 days, that would be significant enough to take notice. The odds of that happening may be a highly unlikely scenario as Phoenix enters it’s spring buyer season, where buyer demand usually trends up.

New listings have been up an average of +27% in the past 90 days. This is very significant and heading in the right direction. We simply need to see the mortgage apps to follow suit in the opposite direction to start seeing reprieve for buyers.

BOTTOM LINE: Keep fighting for your buyers. We are going to be seeing multiple offers for the next several months.

Amy Gerrish, Realtor & Data Analyst
Realty Executives