Barbara Shewbridge is searching for a home in Howard County by attending open houses, quickly visiting homes when they hit the market and expanding her budget to spend more than she originally planned.
She and her husband, Dennis, even made an offer on a home this week, agreeing to spend the $370,000 asking price and still losing out to a better offer.
"It's so frustrating, but I really feel like I've got to jump back out there," Shewbridge said. "The low mortgage rates mean a lot."
The two-year housing boom continues to keep the economy afloat as buyers search for investments other than the stock market to park their money.
"It's a tangible asset," said Al Ingraham, a mortgage banker and regional vice president for First Horizon Home Loans in Timonium and a past president of the Greater Baltimore Board of Realtors. "They understand real estate."
As buyers like Shewbridge search for homes, the inventory continues to shrink, exacerbating the supply-and-demand problem facing the local real estate market.
Average sales prices of existing homes in the Baltimore region rose to $191,950 last month, a 15.31 percent increase compared with April last year, according to figures released yesterday.
Mortgage rates hit lows not seen since 1963, Freddie Mac said yesterday, the result of a healthy bond market, which helps set home loans. Mortgage applications nationwide surged 13.7 percent last week, according to the Mortgage Bankers Association of America, as consumers rushed to take advantage of the lower rates to buy homes or refinance and lower their monthly housing payments.
The number of homes sold in Baltimore and its five surrounding counties fell last month more than 9 percent compared with April last year, in part because of the limited inventory, agents said. The number of active listings last month stood at 6,588 available homes - down 15.13 percent compared with April last year, according to figures by Metropolitan Regional Information Systems Inc., the Rockville-based listing service used by brokers and agents.
Freddie Mac, the No. 2 buyer of U.S. mortgages, said its weekly mortgage market survey showed that 30-year mortgage rates fell to 5.45 percent for the week ending today, surpassing the previous low of 5.61 percent set the week of March 14.
Such figures have some homeowners refinancing again and again as they attempt to lock in on what many believe is a once-in-a-lifetime opportunity. But many in the industry acknowledge that they thought the same thing a year ago when 30-year mortgage rates averaged 6.89 percent.
"We're not quite sure where the bottom is," said Dallas Arthur, president of Bradford Bank in Baltimore, who, like most mortgage bankers, said business remains brisk. "We know it has to bottom out somewhere."
Refinancing activity is so hot that some mortgage bankers, like Arthur, have raised their rates to slow business they can't handle.
Erica Rubinstein of Lutherville refinanced her 20-year mortgage this week, locking in on a 5.5 percent rate and lowering her monthly payment by $80. She last refinanced in December, and Rubinstein said she will keep an eye on rates to see if they fall further.
"I have a pretty limited income and the less money I can spend per month the better," said Rubinstein, a social worker who is self-employed.
The Mortgage Bankers Association of America estimates that rates this year will average 5.9 percent for a 30-year mortgage loan, down from 6.5 percent last year. The group also is forecasting another record year of mortgage loans and refinancings of $3.02 trillion this year. About 65 percent of those loans will be refinancings, the group said.
The loans also have fueled a brisk demand for houses, agents said, but it is not translating into more homes for sale. Many homeowners who would like to trade up or down to take advantage of the low rates have not placed their homes on the market, fearing their existing home will sell quickly and they won't be able to find a place to live.
The Shewbridges, for example, readied their Hunt Valley townhouse for sale during the past few weeks but the couple have held off from listing it until now. They expect to place it on the market this weekend in hopes that they will find something to buy while they take advantage of the sellers' market.
Given the competition, sales contracts that aren't tied to the sale of another home are being accepted before contracts laced with contingencies are considered, agents said.
The Shewbridges are shopping for a home costing between $300,000 and $400,000.
"The prices are outrageous," Shewbridge said. "They need all kinds of work on them. The bathrooms are pink tile and purple. It's just very difficult."
Several real estate agents said they suspect some properties are overpriced but the market is driving the costs. Multiple offers for homes in areas of Baltimore City and Howard County are prevalent.
And homes that do reach the market don't stay there long. It took an average of 54 days for homes to sell last month - 20 days fewer than in April last year.
"It's very hard for people to find and buy houses," said Pat Hiban, an associate broker with Re/Max Advantage Real Estate in Columbia. "When they do find a house, they want to make sure they're not disheartened."
More-expensive homes - those priced at $675,000 or more - are moving a little slower than they have in the past, some agents said. And inventory figures for homes priced at more than $200,000 are higher than they were last year, according to MRIS numbers.
Most agents said many first-time buyers continue to flood the market trying to take advantage of the mortgage rates that will give them similar payments to their monthly rents.
"There's still plenty of buyers out there," said Diana Hirschhorn, an agent with Long & Foster Realtors in Bel Air.