Trending: Mortgage rates indicate more sales to come

Working in real estate can be tricky, trying to figure out when your sales will come and how to find the right ones. Commission causes the slinky effect as you get larger payouts, but there is no guarantee to when the next one will come. So, you get really good at forecasting how the market will look in the coming month, year, etc.

When looking forward to what my year will look like, one of the big things that has my attention right now is the mortgage application trends. We’ve seen a continual boost in the amount of loan applications, which is indicative of the amount of people who are preparing to purchase a new home. So, growing numbers are great. Those who are looking to sell will have a surplus of people lining up to buy a house.

With the larger demand, there is a rise of supply to meet them, which is helping to keep prices from skyrocketing.

Everyone remembers the housing bubble from the recession, and we should keep an eye out for fair play. However, right now there is no great reason for concern. The only piece that we should keep an eye on is the increase in adjustable rate mortgages (ARM). We’ve seen the adjustable rate mortgage application outpace the rest.

Mortgage applications as a whole have seen a 4.1 percent increase, after seasonal adjustments, which is a very healthy sign. The adjustable rate mortgages are just slightly out pacing that number with 5.2 percent

growth in the applications, according to the Mortgage Bankers Association. This isn’t reason for concern yet. In fact, to those looking to sell their houses, it makes absolutely no difference! However, if this number starts speeding up, that means the overall risk in the economy is greater.

The other side to forecasting this, for those who are slightly scared as real estate comes back on line is the increase of 30-year, fixed rate mortgages. These are actually outpacing the rest of the market as well, clock a 4.3 percent increase, although just barely. Even if things go bad in the market, which is unlikely at the moment, we’ll see this chunk stay pretty stable. The middle-class home owner has learned to keep some wiggle room in their budget. So even if things get tight again, these rates will stay the same, and they will have the wiggle room to get by.

All in all, we’re looking at strong indicators, which is likely to push hard come the spring. According to Ellie May, in November it took an average of 49 days from application till the mortgage closes. So, when we’re looking at this boost in numbers, we’re seeing the wave that is likely to hit in the spring of this year. The market is healthy, risky mortgages are low, and healthy mortgages are rising.

This is great news for those working in real estate, even if our families may hate how busy we’ll get. However, for the first-time homebuyer, it’s going to be an exciting spring. Lots of homes on offer, and lots of choices.

Maureen Hughes is the Lead Listing Specialist of The Wayne Megill Real Estate Team of Keller Williams Brandywine Valley in West Chester. For buyer or seller representation, or for more perspective on the local and national real estate market, please email maureenhughes@kw.com and visit The Wayne Megill Team site at www.waynemegillteam.com.

IMAGE FROM MAUREEN HUGHES