Home buyers and homeowners got another chance this week to lock in historically low rates. The 30-year fixed-rate mortgage averaged 2.98%, Freddie Mac reports.

“Despite the re-acceleration of economic growth, the recent bond rally drove mortgage rates down for the second consecutive week,” says Sam Khater, Freddie Mac’s chief economist. “These low mortgage rates, combined with the tailwind of first-time home buyers entering the market, means that purchase demand will remain strong into next year. However, affordability pressures continue to be an ongoing concern for home buyers.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 10:

• 30-year fixed-rate mortgages: averaged 2.98%, with an average 0.7 point, dropping from last week’s 3.09% average. Last year at this time, 30-year rates averaged 2.84%.
• 15-year fixed-rate mortgages: averaged 2.27%, with an average 0.6 point, dropping from last week’s 2.35% average. A year ago, 15-year rates averaged 2.34%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.53%, with an average 0.4 point, dropping from last week’s 2.54% average. A year ago, 5-year ARMs averaged 3.11%.

Freddie Mac reports average commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.

Home buyers don’t have much time to decide whether they want a house or not. As soon as a listing hits the market, the rush is on. Home sales between July 2020 and June 2021 were on the market for a median of just one week before going under contract, according to the National Association of REALTORS®’ newly released 2021 Profile of Home Buyers and Sellers. That marks a record low in NAR data dating back to 1989.

“There’s no plotting of where the Christmas tree will be and measuring for a couch in that scenario,” Jessica Lautz, NAR’s vice president of demographics and behavioral insights, told The Wall Street Journal. “You really are making that decision very fast.”

Home shoppers Anshul and Angharad Bhardwaj told The Wall Street Journal they made more than 20 unsuccessful offers on homes since they started their house hunt in Salt Lake City in September 2020. They finally were successful in February after making an offer on a home within an hour of touring it, even though they were still told it was already under contract. They submitted a backup offer and purchased the house for $780,000 after the initial offer fell through.

Virtual showing tools are helping buyers visit houses quicker. Forty-three percent of buyers found virtual tour options to be particularly useful over the past year, according to NAR’s report.

To make their offers more competitive, some buyers continue to forgo appraisals and home inspections. Twenty-one percent of buyers waived their inspection contingency in September and 23% waived their appraisal contingency, according to the REALTORS® Confidence Index Survey for September.

With competition so stiff, buyers are paying full asking price or more as well. The median sales price was the full asking price in June, the highest on record in NAR’s data. The median sales price was $305,000, an increase from $272,500 compared to a year ago, according to NAR.

In the third quarter, 66% of active home buyers said they spent three months or more searching for a home without success, according to a survey from the National Association of Home Builders. Forty-five percent of prospective buyers say they keep getting outbid by other offers from buyers. (Read more: Bidding Wars Still Burden Unsuccessful Buyers)

Some recent housing reports have seen signs of a cooling period in many markets, following the typical seasonal pattern. But real estate pros say demand remains high for the limited number of homes for sale, and buyers still don’t have much time to reflect on homes or wait to submit offers. “Instead of a house lasting three days on the market, it’s lasting seven days,” Harold Torres, a real estate professional in Orlando, Fla., told The Wall Street Journal, putting the cooling period into perspective. For house hunters, “negotiation and any type of wiggle room is not really there yet.”

Homeowners are striking gold in real estate. The percentage of financed homes that were equity rich in the third quarter grew to nearly 40%, up from 28.3% a year ago, ATTOM Data Solutions reports. A home is considered equity rich when the combined estimated amount of loan balances on the property is no more than 50% of the estimated market value.

“Homeowners across most of the United States could sit back with a smile yet again in the third quarter and watch their balance sheets grow as soaring home prices pushed their equity levels ever higher,” says Todd Teta, chief product officer at ATTOM Data Solutions, a real estate data firm. “For sure, some uncertainty lies ahead as other key market barometers have been a bit shaky as of late. And the coronavirus pandemic remains a threat. But there is no doubt that homeowners continue benefiting big-time from the relentless home price increases we are seeing around the country.”

Most of the top equity-rich places are clustered in the West and South. The states with the largest upticks in equity from the second quarter to the third quarter were Utah, where the percentage of mortgaged homes considered equity-rich increased from 45.5% to 60.9%; Arizona, up from 39.7% to 53.2%; Idaho, up from 54.2% to 65.1%; North Carolina, up from 28.4% to 38.6%; and Nevada, up from 34.9% to 44.9%.

Broken down by metro area, the places with the highest share of mortgaged properties that were equity rich in the third quarter are:

• Austin, Texas: 66.9% of properties are equity-rich
• Boise, Idaho: 66.7%
• San Jose, Calif.: 65.8%
• Ogden, Utah: 62.8%
• Spokane, Wash.: 62.2%

While equity increases, the number of properties that are underwater—those with combined estimated loan balances of at least 25% more than the property’s estimated market value—continues to shrink. Just 3.4% of mortgaged homes—or about one in 29—were considered seriously underwater in the third quarter of 2021. That is down from 6% a year ago, ATTOM Data Solutions reports.

Home prices continue to rise rapidly as homeowners see double-digit gains over the past year. The median sales price of single-family existing homes rose 16% in the third quarter, an increase of $50,300, according to the latest quarterly report from the National Association of REALTORS®. Three metros saw price gains of more than 30% compared to a year ago.

The median sales price of a single-family existing home rose to $363,700 in the third quarter, which does mark a slower pace in comparison to the prior quarter. Still, all four major regions of the U.S. posted double-digit year-over-year growth, led by the Northeast (17.5%), followed by the South (14.9%), Midwest (10.7%), and the West (10.3%), NAR reports.

“Home prices are continuing to move upward, but the rate at which they ascended slowed in the third quarter,” says Lawrence Yun, NAR’s chief economist. “I expect more homes to hit the market as early as next year, and that additional inventory, combined with higher mortgage rates, should markedly reduce the speed of price increases.”

Still, buyers are not letting the higher prices scare them off. “While buyer bidding wars lessened in the third quarter compared to early 2021, consumers still faced stiff competition for homes located in the top ten markets,” Yun says. “Most properties were only on the market for a few days before being listed as under contract.”

Housing Markets With the Steepest Gains

The following metros saw the highest year-over-year home price gains in the third quarter, according to NAR:

• Austin-Round Rock, Texas: 33.5%
• Naples-Immokalee-Marco Island, Fla.: 32%
• Boise City-Nampa, Idaho: 31.5%
• Ocala, Fla.: 29.7%
• Punta Gorda, Fla.: 27.5%
• Salt Lake City, Utah: 26.2%
• Phoenix-Mesa-Scottsdale, Ariz.: 25.8%
• Sebastian-Vero Beach, Fla.: 25.7%
• Port St. Lucie, Fla.: 24.9%
• New York-Jersey City-White Plains, N.Y.-N.J.: 24.5%

Home buyers are still snatching up homes at a quick pace. Homes sold more quickly in October than in any October in recent history, according to realtor.com®’s Monthly Housing Report.

The typical home spent just 45 days on the market in October, reaching an eight-month streak of homes selling faster than in any month before 2021, realtor.com® says.

“The year may be winding down, but 2021’s feverish pace of home sales continues to hit new records,” says Danielle Hale, realtor.com®’s chief economist. “Despite returns to more typical pre-COVID seasonality which means a slower fall versus summer season, October housing data suggests that demand is still unseasonably high.”

Buyers are persisting in their housing search due to low mortgage rates and surging rental prices, Hale says. “Looking at the bigger picture of the pandemic, increased adoption of technology could be playing a key role in helping buyers move further along in the process virtually,” she continues. “With these ‘serious searchers’—some of whom have been planning to buy since before the pandemic—better prepared to jump on new listings quickly and keeping inventory tight, mismatched supply and demand will continue to challenge buyers eager to move on to the next phase of life.”

Home buyers must be ready to make quick decisions as competition remains high. Eighty-six percent of homes sold in less than a month in September, according to the National Association of REALTORS®.

The South is seeing some of the fastest sales. The five fastest-selling metros compared to last year are Miami (–31 days compared to last year); Raleigh, N.C. (–30 days); Jacksonville, Fla. (–17 days); Orlando, Fla. (–17 days); and Memphis, Tenn. (–16 days), according to realtor.com®.

As home values rise, some homeowners may want to brace themselves for a potentially shocking property tax bill, housing experts warn. The magnitude and timing will vary. But property taxes are expected to rise by hundreds of dollars in many areas, even in states such as California and Texas that have laws limiting year-over-year increases.

Property taxes don’t always stay in sync with home price increases, however. “An increase in value does not necessarily mean that the next year’s property taxes will increase at a proportionate rate,” Lee Pierce, senior vice president of lending for Seattle Credit Union, told NerdWallet.

Median existing-home prices have climbed by 13.3% in September compared to a year ago, according to the National Association of REALTORS®.

But even in states that try to shield homeowners from hefty increases in property taxes, owners may still see a higher bill. Eighteen states and the District of Columbia limit how much property tax assessments can rise each year. The caps vary. In California, the assessed value can increase by a maximum of 2%, while in Texas, the maximum increase is 10%.

Homeowners who pay property taxes via an escrow account on a mortgage typically receive an escrow account disclosure from the loan servicers early each year, NerdWallet explains. The statement will include the expected annual cost of property taxes, homeowners insurance, and mortgage insurance if applicable. If the servicer is unable to cover the tax bill from an existing escrow account, they will have the homeowner pay the difference.

Homeowners can instruct their lenders to withhold more each month in their escrow account to avoid potential shortfalls if they believe their property taxes are likely to rise.

With double-digit annual gains fueling homeowner wealth, owners have gotten richer, and they’re starting to take advantage of that added equity.

Cash-out refinancing, which allows owners to take out a lump sum from their equity through loans, increased by 33% in October compared to a year prior, according to Black Knight Inc.

The amount of U.S. tappable home equity reached a record high in October of $9.1 trillion, according to Black Knight.

“We have record home equity thanks to record home prices,” Dan Roccato, a financial analyst with Credible, told Forbes.com. “We’ve had this incredible run-up in home prices over the last 18 months.”

Homeowners must meet certain credit standards to be able to tap into their home’s equity through cash-out refinancing. Lenders usually cap mortgages at 80% of a home’s value.

The median existing-home price for all housing types nationwide in September was up 13.3%, according to the National Association of REALTORS®. NAR predicts that prices slow in the new year, mostly due to rising mortgage rates that will likely lead to fewer home sales. Home prices are predicted to moderate at a 2.8% growth in 2022, according to NAR.