Low Inventory, Low Interest Rates, and a New Refinance Fee

Zillow’s press release today included statistics from around the country which showed that the broad real estate market continues to be favorable to sellers. Year-over-year numbers show a steep increase in sales price, and a deep decrease in number of available homes for sale. Week-over-week numbers show a continued trend for both prices and inventory, raising the question of why are so few property owners putting their homes up for sale this year?

Zillow’s numbers for the Sacramento region show much of the same. There are 44.3% fewer listings for sale today than there were a year ago. And the week-over-week numbers for Sacramento show that the downward trend will continue, as this week saw 10.6% fewer new listings than were seen last week. Many Sacramento neighborhoods are seeing only a few available homes for sale at any given time, and it does not take long for them to go pending sale. The median number of days for an available Sacramento home to go pending sale is a very quick 7 days.

There may be some minor relief for area buyers that have long ago grown weary of the constant competition with each other over our limited housing supply. Summer has ended, the school year has begun, and traditionally these two factors have resulted in a slowing of overall buyer activity. Separately, the Federal Housing Finance Agency have begun adding a half percent adverse market refinance fee to all refinances. While this fee is scheduled to go into effect on December 1st, lenders are already implementing the fee on refinances that are entering the pipeline. This could motivate sellers to put their homes on the market opposed to keeping and holding them when those sellers decide to purchase another property.

I encourage home buyers to keep a positive attitude during their home search. With mortgage rates continuing to be so low, deciding to own opposed to rent makes a lot of sense in most instances. Working with an experienced Realtor who provides you with expert guidance can be a significant positive factor to your buying process. Sacramento and the surrounding communities are a great place to call home. Feel free to call or email me with any questions you may have.