BIRMINGHAM, Ala. (WBRC) - I’m like many people in our area, I just purchased a home. And I can tell you, despite the COVID-19 pandemic, the housing market is booming! Historic low interest rates continue to be a driving factor.
Interest rates hit a 12th record low this year. They are now hovering around 2.78% for the average U.S. 30-year fixed mortgage rate. According to Market Insider, rates are now the lowest in Freddie Mac data that dates back nearly 50 years.
“Birmingham’s housing market, the inventory as experts would say, the inventory is very tight so there’s not a lot of availability,” Hanno van der Bijl, with the Birmingham Business Journal said.
Hanno van der Bijl covers the housing market for our news partners at the Birmingham Business Journal. The BBJ reports more homes sold locally in October than they did in the same month last year by more than 20% according to the latest market report by the Birmingham Association of Realtors.
“So realtors have said because of the pandemic, homes that have big yards and office rooms and playrooms. Those have been very attractive. I mean those go even faster than other homes,” van der Bijl said.
Homes are staying on the market about 35 days. Existing homes are selling at almost 99% of the listing price. According to the BAR, homes on average are selling around $275,000. In Jefferson County, over 950 homes sold at over $282,000. In Shelby County, just over 500 homes sold at over $320,000 on average.
Mortgage purchase applications also increased by almost 24% in October compared to this time a year ago.
You can read more about the numbers here from the BBJ: https://www.bizjournals.com/birmingham/news/2020/11/11/bar-reports-strong-october-for-bham-housing-market.html
“It’s a great time to be a seller,” David Emory broker/owner with RE/Max Southern Homes said.
Emory says in this hot market, you need to have all your finances in order first to put you in front of the line of homes that are receiving multiple offers in a few days to even a few hours of being on the market.
“You’ve got to stand out. Some of the ways to stand out is with the money. It’s not unusual for houses to go well above the asking price now and that’s hard for some people because real estate is always negotiable,” Emory said.
With the housing market like it is, how long will the low interest rates stick around?
“We’re going to be this way for at least for another 18 months I think. All indicators that I’m aware of from the financing side of it, rates are not going to go up. They are going to be stable at this historic low amount. Inventory is going to remain low,” Emory said.
So, you may be asking if now is the time to refinance your home? I’ll talk with an expert about that next week. Stay tuned!