Mortgage Rates Drop Below 7%! ?? Is Now the Time to Buy?
Karlton Uhm
Helping First-Time and Move-Up Homebuyers to Mortgage Success with 25+ Years Experience | Simplifying the Home Loan Process | Committed to Educating & Communicating
National news and local views for the week ending Friday, February 28, 2025
As February comes to a close,?homebuyers are finally enjoying some rate relief,?with mortgage rates falling below 7% for the first time since December. Meanwhile,?home prices continue to rise, underscoring the importance of buying sooner rather than later. However, existing home sales began 2025 slowly, although transaction volumes still exceed last year’s figures.
National Real Estate News
A little rate relief
Average 30-year mortgage rates have fallen below 7% for the first time since early December 2024. Why is this occurring? It’s mainly due to what is referred to as the ‘risk-off’ trade. The stock market, regarded as riskier, has become increasingly unstable lately. When investors sell stocks, the proceeds often shift into the bond market, which is viewed as less risky, which increases bond prices and subsequently lowers bond yields.
The high cost of waiting
Over the past five years, the Case-Shiller national home price index has risen by 53%, which reflects a compounded annual growth rate of nearly 9%. The index has experienced declines only six times over the last 83 years (since 1942). This leads to a 93% success rate for appreciation, with home price growth averaging 5.4% annually.
A slow start to 2025
Transaction volumes (existing home sales = sales of previously owned homes) decreased by 4.9% month-over-month in January 2025, reaching a seasonally adjusted annualized rate of 4.08 million homes. This figure is relatively low by historical standards; however, it marks the fourth consecutive month in which transaction volumes exceeded those of the same period last year.
Local Market Trends
As of Friday, February 28, 2025
The?local market remains stable, with?price increases in Naperville, Elgin, and Schaumburg,?while Bloomingdale has dipped slightly. Active listings are?holding steady, and?homes in Naperville continue to sell the quickest, averaging just 22 days on the market.?Elgin’s increasing inventory offers more options for buyers, while Schaumburg remains a strong market for both buyers and sellers.?As rates decline and home prices rise, buyers may want to?act before affordability tightens again, and sellers should price their homes competitively to attract motivated buyers.
Let’s connect and strategize your next move in this evolving market! ??
Karlton Uhm
Society Mortgage Company
NMLS #186188
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Society Mortgage DBA Consumer Real Estate Finance Co. | 330 SW 2nd Street. #111 Fort Lauderdale, FL 33312 | https://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/104621 | Equal Housing Opportunity and Lender
Great advice!