More people applying for mortgage loans across the country and in Sacramento
With mortgage interest rates dropping, more people across the country and in Sacramento are applying for loans.
The number of mortgage applications submitted nationwide during the last week of February was up 20% over one week before that, according to a Mortgage Bankers Association news release citing Market Composite Index data.
The uptick is also happening locally, said Sacramento real estate agent Kelly Pleasant. Homes that are upgraded and updated in neighborhoods like East Sacramento, Arden Oaks and Carmichael are especially in demand right now, he said. A home in Carmichael recently had roughly 40 people show up to an open house.
“I used to see zero to one offers, and now I’m seeing one to three offers for certain properties” said Pleasant, founder of Pleasant Real Estate Group. “I haven’t seen an uptick like that in quite awhile for that type of activity.”
First time home buyers have especially been taking advantage, Pleasant said.
“That little price difference in rates can add $40,000 to $50,000 for their buying power,” Pleasant said.
The price drop still isn’t steep enough to persuade many renters to buy their first home, however, said Mike Frank, a Sacramento mortgage lender.
“What I’m seeing in general is a $1,500 to $2,500 difference in a (monthly) rent payment versus owning and that gap is just really wide,” Frank said. “Obviously those with super low rates are not moving up or down in any number so that plays a role but I really believe the first time home buyer is just in a place where renting makes too much sense at the moment.”
The average mortgage interest rate was about 7% in January, compared to 3% 2021, which is causing more people to stay put in their homes in order to keep their great rates. There were about 22,500 homes sold in the Sacramento region last year, down from about 40,000 sales in 2021, according to Zillow.
The current rate is down slightly, at about 6.49%, Frank said.
Even with the new national data showing the uptick in loan applications, the Sacramento home buying market is still not “blazing hot,” said Ryan Lundquist, Sacramento appraiser and housing market analyst.
“Overall, the best way to describe the seasonal market is warm so far — not blazing hot,” Lundquist said in an email. “The year began with higher rates, and I think buyers have been feeling that, which explains why the number of sales so far hasn’t been robust. If rates do persist to go down, that should help with buyer demand.”
