In our area, all over LA, and nationwide, It has been a hot Sellers’ Market since June of last year. This 9-month-long streak almost rivals the record 15-month streak from April 2012-July 2013. That summer, higher interest rates were that which ended the run.
The sharp rise in mortgage rates from a record low of 2.65% first week of January to 3.09% in March is just the beginning of rising rates. As mortgage rates continue to increase, inevitably the housing market will evolve from its current crazy pace to one that is much more tolerable.
Homes were typically on the market for 53 days at the start of 2021. They now sit for a maximum of 33 days if that long, and sales come complete with multiple offers and bidding wars as the new normal.
There is a close, proven correlation between the 10-year US treasuries and mortgage interest rates; they rise and fall together.
As multiple vaccines become available, it is generally felt that there is light at the end of the pandemic tunnel. Additional positive outlooks like relief bills, improving employment rates, and overall recovering economic factors will all feed into a rising 10-year treasury and in turn, 30-year mortgage rates.
Experts are looking toward a robust second half of 2021; the next “Roaring 20s”. Prior to the pandemic, interest rates were between 3.5% and 4%, and forecasts call for the same by year-end. This is predicted to be that which will cause the market to normalize and even decelerate.
And still, this will remain a Sellers’ Market for a while longer.