Affluent Americans taking advantage of mortgage rates, work-from-home flexibility
Sales of luxury homes rose 41.6% year-over-year in the first quarter of 2021, crushing sales of affordable homes (7% increase) and mid-priced homes (5.9%), per a recent report from Redfin.
Redfin defines “luxury” homes as selling for an average of $975,000, “expensive” homes as selling for an average of $429,000, “mid-priced” as selling for an average of $272,000, “affordable” as selling for an average of $184,400, and “most affordable” as selling for an average of $99,000.
The study showcases both sides of the COVID-19 crisis, with affluent Americans taking advantage of low mortgage rates and the ability to work from anywhere, and buying up high-end houses — particularly in popular vacation destinations. Meanwhile, many lower-income Americans have lost their jobs and lack the means to become homeowners.
Closed sales of existing homes fell 3.7% in March to a seasonally adjusted annualized rate of 6.01 million units, according to the National Association of Realtors.
The median price of an existing home sold in March was $329,100, a 17.2% increase from March 2020.
Mortgage rates started this year near a record low but then began climbing steeply in February and throughout most of March.
But it’s not a tax credit, and conditions limit how many people will qualify
The newest draft of a down-payment assistance bill would provide $25,000 to first-time homebuyers, but only those who are also first-generation homebuyers and economically disadvantaged. Plus Biden’s proposal is not actually a homebuyer tax credit, but it is money that would be available at closing.
Last week’s drop in rates pushed millions of borrowers back in to “high-quality candidate” status
Another 2 million borrowers could save an average of nearly $300 a month on a refinance thanks to last week’s 10-basis-point drop in mortgage rates. Recent data from Black Knight found the number of high-quality refi candidates moved back up to 13 million last week — potentially putting $3.6 billion back in to homeowners pockets.
With a pandemic pushing folks to work from home and households seeking more space, not to mention all-time low mortgage rates, a record number of homeowners, says Redfin.com, are looking to relocate to a new metropolitan area—but this trend is creating unprecedented issues for those attempting to upgrade or move within their own area.
“With a record share of Redfin.com home searchers looking to move to another metro, out-of-towners are making it difficult for local residents to win bidding wars,” says a new report from the technology-powered real estate brokerage. For example, “the average out-of-towner moving to Phoenix, the most-coveted locale for movers, has $630,000 to spend on a home, versus $510,000 for locals.”
Nationwide, 31.5% of Redfin users sought to move to a different metro area in the first quarter. That’s up from 30.3% in the fourth quarter of 2020 and 26% a year earlier, and the highest share since Redfin started tracking migration in 2017.
Among the four counties that make up the Portland metro area, Clark County had the second-most homes sold in the quarter with 1,932, behind Multnomah. But it had the lowest median sale price of homes, at $439,598, compared with a median price $546,132 in Clackamas County, where prices were highest.
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