We’re almost 90 days into the COVID crisis and the end is nowhere in sight.
The new normal may be here to stay. At least for the foreseeable future.
This isn’t necessarily bad news for the real estate market.
The last 2-3 months have produced a record number of transactions as people capitalized on low rates. But what’s ahead for the future?
Here are 3 trends we think will play out for the remainder of 2020:
Trend #1: Home Buying Will Feel Like an Amusement Park Ride
Verifying employment has caused issues for many potential home buyers over the last few months. While this will continue to be a concern as the economy opens back up in stages, the numbers show people are coming out in force to purchase homes.
As of mid-May, CNBC reported that purchase home loan applications were up 11% after hitting a low point in late April.
In short, buyers are coming back out in a rebound as local economies reopen.
The general uncertainty has also caused some sellers to take their homes off the market. As a result, some builders are reporting an increase in sales since they have inventory readily available.
In short, you’ve got to be flexible for the foreseeable future if you’re trying to buy or sell a home.
Trend #2: Interest Rates Aren’t Going Anywhere
It’s hard to imagine rates dropping much lower than they are right now.
However, it’s even harder to imagine the FED raising interest rates any time soon.
COVID’s impact on jobs, businesses & the employment rate means regulators will likely remain cautious about rate hikes until the economy looks more stable. It’s unlikely that will be any time soon.
Trend #3: People May Be Staying In Their Homes Longer
A recent article by Housing Wire cited that refinances had reached a 17 year high.
They ALSO stated that approximately 8.8% of US mortgages were in forbearance as of mid-May.
That’s an interesting combination in the real estate world.
The sheer numbers of people deferring mortgage payments and refinancing at incredibly low rates points to people staying in their homes longer.
In the short term, this could impact the number of homes on the market as well as decrease the number of potential buyers who may or may not have credit issues related to forbearance.
It also means it’s a good time to be a home improvement contractor!
There’s never been a better time to re-evaluate your mortgage
If you haven’t taken a good hard look at the rate & term on your current mortgage loan, now may be the time.
Also, if you’ve been thinking about buying a home and are comfortable with your income situation, you’ll kick yourself for missing this opportunity.
Get in touch with us today for a free initial consultation.