Home sales make record jump, proving how sensitive buyers are to interest rates

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Sales of existing homes skyrocketed a whopping 11.8 percent in February compared with January, according to the National Association of Realtors.

That is the largest monthly jump ever, with the exception of a change in mortgage policy in 2015 that temporarily skewed the data.

At the start of last year, housing demand was robust and rates relatively low, with the average rate on the popular 30-year fixed right around 4 percent, according to Mortgage News Daily. That caused a frenzy in buying through the spring. But with supply remaining tight, prices overheated. "You can see we're still trending to moderation, as years of high price gains has offset the benefit of lower rates," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group."The much more timely weekly mortgage applications is seeing flat growth year over year, but let's hope that the Spring selling season will see a pick-up in transactions.

 

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How did we survive- 17-20% interest rates in the 70’s, 80’s.?

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