Last night, I presented one of nine offers on a Sunnyvale house in the $750,000 price range. We are used to seeing multiple offers on bank-owned properties priced under $600,000, but this activity in the mid price range is a relatively new phenomenon.We know that the $8,000 tax credit is a factor, as is the increase in consumer confidence, but the biggest catalyst seems to be the recent increase in interest rates. Fixed-rate mortgage rates followed long-term bond yields higher this week according to Freddie Mac.
Last year at this time, the 30-year fixed rate mortgage averaged 6.08 percent.
It has now moved up from around 4 1/2% to 5% or more, still a relative bargain, but enough of an uptick for borrowers to realize that interest rates have probably bottomed out. First-time buyers are jumping off the fence in droves, and with our local inventory at a two year low, this is a sure recipe for more multiple offers to come.
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