What Buyer Activity Reveals About the Real Estate Market
Though the housing market is no longer experiencing the frenzy of a year ago, buyers are showing their interest in purchasing a home. According to U.S. News:
“Housing markets have cooled slightly, but demand hasn’t disappeared, and in many places remains strong largely due to the shortage of homes on the market.”
That activity can be seen in the latest ShowingTime Showing Index, which is a measure of buyers actively touring available homes (see graph below):
The 62% jump in showings from December to January is one of the largest on record. January also had more showings than any other month since May. As the graph shows, showings tend to go up in the beginning of the year. However, the jump in January was bigger than usual, and mortgage rates are a big reason why. Michael Lane, VP of Sales and Industry at ShowingTime+, explains:
“It’s typical to see a seasonal increase in home showings in January as buyers get ready for the spring market, but a larger increase than any January before after last year’s rapid cooldown is significant. Mortgage rate activity this spring will play a big role in sales activity, but January’s home showings are a positive sign that buyers are getting back out there . . .”
It's important to remember that mortgage rates were around 6% in January, which helped explain why so many people came to look at homes. What's the meaning? When mortgage rates went down, buyers became more interested. One thing is clear from the rise in home showings at the beginning of this year: rates may be unstable right now, but there are interested buyers out there who are ready to move when mortgage rates are good.