Mortgage Rates Fall Further, and Buyers Are Swooping In

January 8, 2020

The first open houses of the year are drawing out the crowds, real estate pros report. Low mortgage rates—which dipped even further this week—may be driving some of that activity.

An open house in the Atlanta area last Sunday for a newly renovated, three-bedroom, two-bath house for $335,000 drew a crowd of about 34 people during a two-hour time span. Listing agent Melissa Fuentes says she’s conducting two second showings this week and expects an offer by the end of the week.

The home attracted homeowners and investors alike. “With the market value the way it is right now, there’s a lot of people jumping on the same kind of real estate that I’m looking to invest in,” Michael Tartly, who is looking for an income property in the Atlanta area, told CNBC.

Economists have already predicted that January could be a hot selling month this year across the country and lower mortgage rates are certainly helping to kick off a winter selling season, they say.

The average rate on the 30-year fixed-rate mortgage dropped to its lowest level since October this week, at 3.69%, Mortgage News Daily reports.

The continued strength in consumer sentiment about the housing market “attests to the intention among consumers to purchase homes,” says Doug Duncan, Fannie Mae’s chief economist. Fannie Mae’s housing sentiment index, a survey of consumers, remained near an all-time high in 2019, fueled by a 16 percentage point annual increase in the share of consumers who believe it is a good time to buy.

A decline in mortgage rates—down by more than 1 percentage point for fixed-rate loans compared to November 2018—is buoying higher sales activity, says Frank Nothaft, chief economist at CoreLogic. Nothaft adds that any slowdown in home prices in early 2019 likely ended in late summer. He predicts prices to rise well into 2020.