CHM Blog

Why the right home still starts a bidding war

Sounds like a movie title: The few. The proud. The move-in-ready. Although most homes are sitting on the market longer than in the past, a select few are flying.

The typical home for sale in March had been on the market for 56 days, according to Zillow. But homes that actually went under contract spent a median of just 19 days listed. That 37-day gap is the widest for any March since 2020 — right before the pandemic turned the market upside down. Zillow economist Kara Ng put it plainly. Four years ago, "people were buying homes indiscriminately." Today, she says, "the bar is higher — people are the opposite of indiscriminate."

So what clears that bar? Location matters. The Midwest and Northeast, where new construction has been sparse for years, tend to move faster simply because there's less to choose from. But across most markets, the homes selling quickly share a common thread — they're priced right, move-in ready, and free of major repair issues.

Buyers are spooked by renovation costs, and for good reason. An aging roof doesn't just mean a repair bill — it can spike insurance premiums or make coverage nearly impossible to get at all. About 34% of homes currently on the market need repairs or updates, according to a March survey by John Burns Research and Consulting. Many of those sellers are choosing to list as-is anyway.

That's leaving an opening for sellers willing to do the work upfront. Jake Cross and his wife listed their renovated home in St. John, Indiana, for around $300,000 after upgrading to a larger place. The day after it hit the market, the first buyer through the door made an offer above asking. "There's absolutely nothing for sale in the $300,000 range that looks modernized at all," Cross said. They accepted on the spot.

Pricing is the other make-or-break factor. A March survey by Realtor.com found that nearly half of potential sellers expected to receive their full listing price, and more than a third expected to sell above it. That kind of optimism can stall a sale fast. Paige Martin, a Houston real estate agent, has seen it firsthand. "For those who are aspirational in what they are hoping to get, because their neighbor got it a year and a half ago, those folks are having a little bit more trouble."

Even sluggish markets have their pockets of heat. In Tampa, 16% of homes that went under contract in February did so within 7 days of listing. Of those, nearly 1 in 3 sold above the list price.

The market isn't frozen. It's just very particular.

WSJ, TBWS

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways today. The MBS market worsened by -12 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Central Banks, 3) Inflation.

1) Geopolitical: Yes, this will continue to dominate the direction of the bond market this week as Iran/Straight/etc will continue to impact both import prices and flight to safety.

2) Central Banks: We hear from 5 major Central Banks this week. The market will focus on our own Federal Reserve which will give us their Interest Rate Decision and Policy Statement on Wednesday at 2 pm ET. All eyes will be on Fed Chair Powell's speech afterwards. But we are not the only game in town as we also get rate decisions from the Bank of Japan, Bank of Canada, Bank of England and the European Central Bank.

3) Inflation Nation: We get the Fed's key measure of inflation (Core PCE) on Thursday. The Headline is expected to almost double from the prior month, but the Core expected to rise only from 0.3% to 0.4%.

This Week's Potential Volatility: High

This morning markets are seeing some sideways trading. Volatility has started low but could become high at any point this week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.