“Mortgage rates dropped further this week following the downward trend of the 10-year Treasury yield. Specifically, the 30-year fixed mortgage rate fell to 2.90% from 2.98% the previous week. Homebuyers continue to benefit from low mortgage rates as home prices reached a new record high at $350,300.
In the meantime, millions of people moved during the pandemic, driven by the opportunity to work remotely, the desire for more space, and better affordability. Suburbs and small cities were clearly the winners, gaining most of these movers. While 1 in 3 movers typically buy a home, this means that there are still many who are renting. Low housing inventory and uncertainty in the future about remote work opportunities were some of the reasons that prevented these people from buying a home. However, now as companies look beyond the pandemic, many are deciding whether to bring employees back to offices or allow them to work remotely and move away permanently. With teleworking to stay even after the pandemic, expect homebuying activity to remain strong in the following months as people will be asked to decide what to do with their jobs. It’s very promising to see inventory levels rising in the last three months. This could ease price gains, most likely starting in the fall. However, don’t expect prices to drop. NAR estimates existing-home prices to rise 9% and 3% in 2021 and 2022, respectively.”