According to stats from two separate reports*, buyer demand dramatically increased over the last three months, leading into this spring buyers’ market (the March market data is not yet available).
Both the Showing Index, Showing Time and the National Association of REALTORS Buyer Traffic Index show that buyers demand has increased in each of the last three months.
Why is there a increase in demand? Increased buying power due to lower interest rates!
According to the National Association of Realtors’ (NAR) Economists’ Outlook Blog, purchasing a home has become more affordable, which has led to increased demand.
“Due to the combination of falling house prices and mortgage rates, the income needed to make an affordable mortgage payment (mortgage no more than 25% of income) on a median-priced home with ten percent down payment and 30-year fixed rate mortgage decreased from $60,425 in June 2018 to $53,783 as of February 2019, and the difference of $6,642 represents a gain in buying power because one can afford a home purchase at a lower level of income.”
What does this mean?
It appears the spring buyers’ market is going to be a lot stronger than many had anticipated. If you are selling or buying, this is important news.
*The methodology behind the indices:
The Showing Index ShowingTime
“The ShowingTime Showing Index® tracks the average number of buyer showings on active residential properties on a monthly basis, a highly reliable leading indicator of current and future demand trends.”
The National Association of REALTORS(NAR)® Buyer Traffic Index
“In a monthly survey conducted, NAR asks respondents ‘Compared to the same month last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?’ NAR compiles the responses into an index, where an index above 50 indicates that more respondents reported “stronger” traffic than “weaker” traffic.”