"The biggest difference is the shortage of inventory. The reason is that as fast as the inventory is coming on the market, is as fast as it's selling," says Louis Vinci, a real estate broker with Realty USA, and president of the Buffalo Niagara Board of Realtors.
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Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year fixed loan fell to 3.43 percent from 3.54 percent last week. That's near the 3.31 percent reached in November, which was the lowest on records dating to 1971.
The average rate on the 15-year fixed mortgage dipped to 2.65 percent from 2.74 percent last week. That's slightly above the record low of 2.63 percent, also reached in November.
Low mortgage rates are helping sustain a housing recovery that began last year. Home sales and residential construction are up, prices are rising and more Americans are refinancing. That's helped the broader economy.
David Stapleton of David Homes in Lockport says it's almost like a switch being flipped in the past year, with demand for new builds also on the rise.
"There's a lot more confidence. It is quiet confidence but it certainly is there," he says noting that the upswing is even being seen in places with more traditional slow demand.
"Really what we are finding is there is a shortage of buildable lots today (in WNY),"
- David Stapleton, David Homes.
Mortgage rates have been low because they tend to track the yield on the 10-year Treasury note. The yield has fallen in recent weeks and went as low as 1.71 percent April 5, after a weak report on March hiring drove investors to seek the safety of a U.S. Treasury bonds. When demand rises, the yield falls.
On Thursday, the yield was up to 1.79 percent, still low by historical standards.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for 30-year mortgages was unchanged at 0.8 point. The fee for 15-year loans also was steady, at 0.7 point.
The average rate on a one-year adjustable-rate mortgage edged down to 2.62 percent from 2.63 percent last week. The fee for one-year adjustable-rate loans slipped to 0.3 point from 0.4.
The average rate on a five-year adjustable-rate mortgage fell to 2.62 percent from 2.65 percent. The fee held at 0.5 point.
Related: Last week, Federal Reserve Chairman Ben Bernanke said housing remains depressed in many low-income neighborhoods even though the overall home market is making gains.
Bernanke is urging a broad approach to the problem that seeks to improve education and jobs for lower-income Americans, in addition to housing.
The Fed chairman says any solutions will have to be tailored to whether a low-income neighborhood is urban, suburban or rural. He was speaking at an annual Fed community affairs conference. Bernanke didn't address the Fed's interest-rate policies.