The Coronavirus pandemic has created an unprecedented time in the real estate industry. But in this time of uncertainty, there is also a time for opportunity. In real estate, our team always recommends making thoughtful and informed decisions based on consultation, research and reflection. We want to be a resource for anyone looking for assistance and guidance.
As the markets continue to progress and change, there are several reasons why this could be a good time to buy a home. According to the New York Times, mortgage rates have dropped drastically which opens more buying power and additional homes to consider. In comparison, in 2018 the mortgage rates hit a 4.94% high and on March 1st, 2020 the rate dropped to 3.45% (Freddie Mac Primary Mortgage Rate Survey). Banks and mortgage brokers have seen an influx of customers seeking to refinance their loans at these lower rates. In some cases, the increase in customers was so acute that mortgage lenders had to adjust their rates to slow demand.
Another reason to consider buying a home is the current buyer landscape has slowed. According to Trulia, spring produces a rush of potential buyers which means higher frequency of bidding wars and more competitive prices. In light of the Coronavirus, casual buyers are more likely to opt out of looking for homes and there will be fewer serious buyers to place bids on highly sought-after properties.
Experts are predicting a recession, but a recession shouldn’t impact the values of homes. According to MarketWatch, this next recession is actually unlikely to prompt a major downturn in housing. Historically, home price appreciation continued during previous downturns. The National Association of Realtors reported that in past downturns, home price appreciation continued at an even rate with existing home sale growth only slightly edging downward.
It is important to note that we are still observing the ripple effect of COVID-19, so we are not declaring that these observations are infallible. However, in our commitment to serve our clients, we wanted to share information that may help you in your decision making. Please be assured that we will continue to have your back and support you through this unfamiliar time.
As the Coronavirus Spreads, a Question: ‘Will Mortgage Rates Stay Low?’ https://www.nytimes.com/article/coronavirus-mortgage-rates.html
Freddie Mac Primary Mortgage Market Survey
Is Spring the Best Time to Buy a House? Maybe. https://www.trulia.com/blog/spring-best-time-to-buy-a-house/
As recession fears mount, here’s why home prices may not plunge alongside the stock market. https://www.marketwatch.com/story/are-you-waiting-for-house-prices-to-drop-during-the-next-recession-heres-why-you-could-have-a-very-a-long-wait-2020-02-07