Interest Rates and Buyer Demand Rise
The interest rate for 30 year fixed loans has risen about .75% during the last two weeks. This happens regularly as banks are quick to raise rates when they receive economic data signaling a stronger economy and the potential for inflation. In the past we have seen fixed loan rates rise as much as 1.5% in a week. Remember as recently as 2000 fixed rates were 8.25%!
It is also common for rising rates to fuel a burst of home sales as buyers who were sitting on the fence jump in before rates rise further. The number of homes sold has jumped by 100% from March and April sales, and up by 500% from January and February sales in the south Peninsula market areas (Los Altos, Palo Alto, Menlo Park).
Jeff and Steve