Typically, this time of year starts the busy season for the real estate market.
Around this time, more and more sellers are either listing or getting their homes ready to sell in the coming months. On the other hand, home buyers are typically beginning the preapproval process with mortgage lenders and checking online real estate websites hourly to see the newest listings to hit the market.
This was the case about a week ago, but now you may be wondering if you should put your plans to buy a home on hold? With the recent spread of COVID-19 and increasing sentiment of social distancing, there have been changes to the market that you should consider before you decide to buy a home.
3 Factors to Consider When Deciding If You Should Buy A Home Right Now
1. Income Stability
As many industries are suffering from the impact of COVID-19 and social distancing, people all across the country are finding themselves without work or a definite timeline of when they will receive their next paycheck.
On the other hand, some industries are booming as a result of increased demand for delivered goods and technical needs for many people now working from home.
Wherever you fall among this change, it is important to realistically look at your source of income and determine if it is stable or not. If your income is not affected by this change, then it may be a good time to start building equity in a tangible property. If you are short on cash for the unforeseeable future, then it is probably best to postpone your home search to avoid putting yourself at an even greater financial risk.
2. Mortgage Rates Are Lower Than Ever
Mortgage rates have been on the decline for a while now and are expected to stay low.
According to Freddie Mac this week, the current rate for a 30-Year loan is hovering around 3.36% and 2.77% for a 15-Year loan.
As a result, many homeowners are rushing to refinance to take advantage of these low rates, but what does this mean for homebuyers?
With mortgage rates at historic lows, this could be a good time to get preapproved and lock in a low rate if you're in the market to buy.
However, with the rising demand, lenders are having a hard time keeping up and are actually offering different rates. So if you are planning to take out a mortgage, it may be a good idea to shop around.
3. Urgency to Move
Whether or not you have a strong need to move could be a big factor to consider right now when debating on halting or continuing your home search.
Even though the coronavirus has drastically affected the lives of almost everyone around the world, this doesn't mean that life in itself has stopped.
Some people are in the middle of job relocation which means they have to find housing in a new place. On the other hand, many renters have leases ending which poses an urgent need to figure out if they are going to sign another lease or start building equity in a home. This is also the time when parents are starting their moving process to get into a new home before the coming school year.
Whichever the case may be, it's a good idea to consider whether you feel this move is urgent or if you feel more comfortable waiting a little longer to see how things pan out.
How to Stay Safe When House Hunting
As you can see, the recent changes across the world with the spread of COVID-19 are impacting life tremendously. However, that doesn't mean you can't carry on and move forward.
If you are looking to continue your home search and take advantage of some of the positive opportunities out there right now for homebuyers, then there are several things you can do to stay safe and continue house hunting.
4 Ways to Protect Yourself While Buying A Home
- Search for homes online. Most homebuyers are already searching online, so this one won't be a big change. Luckily with the numerous real estate websites out there today like SimpleShowing, Zillow and Realtor.com, you can search all of the available homes on the market without ever leaving your couch. Some websites even show virtual tours that can give you an even better feel of what the home is like inside.
- Protect yourself while touring homes. If you've found homes that you'd like to see, then you can also book showings online without needing to leave your home. To protect yourself during the in-person tour, it is probably best to wear gloves and avoid touching items with your hands. You can also request that the showing agent either wait outside while you tour or kindly ask them to keep the recommended distance of 6 feet away to protect both parties. If you do not feel comfortable touring in-person, you can also request a virtual tour from SimpleShowing where the agent will video call you from the property to show you around. To request a virtual tour, just book a showing as normal and mention the "virtual tour" in the notes section.
- Add a Coronavirus Addendum to your contract. Many states are now offering the use of a coronavirus addendum that allows extensions of things such as the closing date, due diligence and financing period. This can also protect buyers should things fall through on the lender's side as a result of the pandemic.
- Keep all in-person contact with your mortgage lender, realtor and all involved parties to a minimum. With the technology available, you can sign documents online, have meetings virtually, and discuss important topics over the phone which should enable you to keep contact with all involved parties to a minimum. Your agent should be able to write up your offer online and send it to you virtually, so you don't have to be present to make a move on a house you love. In addition, some real estate attorney's have even started limiting the number of people who attend closings, so you will be protected when you need to close at the end of the process.
Chat With SimpleShowing at No-Obligation to Discuss Your Situation
If you would like to speak to a professional who is up to speed on the current market, then you can call our team of real estate professionals at no-obligation to figure out what's the best next step for you.
Plus, if you decide to buy, we'll give you an average check of $5,000 towards your closing costs or as cash at closing with our Buyer Refund Program.
The tumultuous global economy, coupled with the uncertainties of the COVID-19 pandemic, has indeed impacted the real estate sector. Yet, real estate agents have adeptly navigated these uncharted waters, enabling property buyers to continue investing despite the crisis. The housing market has shown incredible resilience, with property prices remaining steady, even as other sectors like the stock market and small businesses have felt the brunt of the pandemic.
Lower credit scores, which were once a hurdle for potential home buyers, are now less of a concern as many lenders have adjusted their requirements. There's a significant increase in home loan approvals, and mortgage applications are on the rise. Interest rates are at historic lows, making it an opportune time for home buyers to secure a home loan. However, it's critical to get pre-approved before diving into the market as lenders are implementing stricter criteria due to economic uncertainties.
The dynamics of the real estate market have also transformed, with many locations reporting multiple offers on properties and home inspectors adapting to social distancing protocols. Moreover, despite a higher down payment requirement in some cases, there's still a robust demand from buyers. Overall, the decision to buy a home amidst COVID-19 and social distancing is a personal one. With the help of experienced real estate agents and a thorough understanding of the current market dynamics, potential home buyers can make informed decisions that best suit their financial situation and lifestyle preferences.