Just a few days ago, the Federal Reserve released a statement from their most recent meeting that suggested that their policy of keeping key interest rates at record lows may be changing. Previously it was expected that the “Fed” would not raise rates until Fall. Now it appears the first rate increase may come sometime this Summer. While interest rates on home loans are not tied directly to the “Fed Rate,” it is impacted by rising rates, especially ARM products. Rates during January fell to as low as 5.375% on a 30 year fixed before rising to almost 6.0% by the end of the month. The latest round of snow storms and subzero temperatures has cooled off the Open House traffic but buyer activity is still strong. There’s been a bump in new listings on the market in the last week or two, which I expect to increase even further as we head for Spring. February looks to be a good month for buyers and sellers. Interest rates are expected to hover around 6% and housing demand should rise as the month goes forward.

January has started off great!  Between Thanksgiving and Christmas the market slowed down dramatically (as is normal for the time of year) but has since picked up nicely.  Many homes that were still for sale in late 2003 expired close to the end of the year and I am seeing some of those houses come back on the market, as well as some new homes.  Interest rates are still hovering around 5.75% on a 30 year fixed rate loan which means buyers still have ample opportunity to take advantage of the good deals in the market right now.

I expect January to be more active than December but there will be an even greater pickup of new listings and new buyers in February and March.  While I am still waiting to see final compiled statistics, 2003 will go in the record books as the best year in Twin Cities real estate history.  With the stock market continuing to push upward, jobless claims continuing to fall, low interest rates, and warmer months ahead, we are shaping up for another strong “Spring Market” for real estate sales.

If you are a buyer, this is absolutely the best time to make an offer… before most buyers hit the market in the coming months.  If you are a seller, you should be working on preparing your home for sale now.  Please see my tips for suggestions on how to prepare your home for showings.