As parts of the nation shut down restaurants, schools, and other entertainment and retail businesses, people who are browsing the market for a new home have noticed that interest rates are decreasing. This is leading potential homeowners to wonder whether or not this is the right time to a house or not, and banks and other lenders are wondering just what this means for the housing market.
Lower Interest Rates
The Federal Reserve has slashed its benchmark interest rates to nearly zero, which could mean that lenders continue to drop their mortgage rates. The new borrowing rate from the Federal Reserve is between 0 and 0.25 percent. The Open Market Committee also released a statement telling the American people that the rate would stay low until the committee is confident that the economy is back on track to achieve both maximum employment and price stability.
However, even with lower interest rates, are people buying homes? It seems that some people are looking to purchase homes despite the coronavirus and its impact on the stock market. In fact, some people on jumping on the potential for low interest rates in this market.
Financial experts are saying that you shouldn’t be worried about jumping on a house right now if you aren’t ready, as these rates could continue for a while. There is no pressure to purchase right away, especially if you feel that you lack job security at the moment.
More or less, if you are in the market for a home and can reasonably afford one as well as a keep a healthy savings account, you might be at an advantage buying a home right now. However, if you aren’t quite there just yet, you are better off waiting.
How is the coronavirus affecting home buying in a time of social distancing?
How Is Social Distancing Affecting Home Buying?
As Americans practice social distancing, the process of avoiding contact with those outside of the family unit with the intent to slow the spread of COVID-19, many sellers are wary of having open houses and strangers in their homes. As quarantines continue to be implemented across the country, it might also become impossible for those wanting to purchase a home to see the house in person prior to the sale.
One possible solution is to provide virtual meetings and tours of properties. For the current sellers, this would prevent a bunch of strangers from walking around your home and potentially bringing the coronavirus into the house. For buyers, this solution allows them to better see the home than they could in photos, which often don’t help buyers understand the exact layout of the house.
With a video tour, fewer people will have access to the home, but the seller will give interested parties the ability to see the home, which increases the chances of the house selling. Live video walk-throughs of the home will allow the real estate agent to talk about the features of the home and answer any questions that the potential buyers may have. This method also allows agents to get up close to areas of the home to show buyers problem areas.
Some sellers are still allowing people into their homes for showings, but they are asking visitors to take extra steps to ensure cleanliness in an attempt to prevent the spread of the virus. For example, some sellers are asking realtors only to do private showings to limit the number of people who are in the house at one time. Additionally, they are asking everyone to wash or sanitize their hands thoroughly upon entering the home. Many homeowners are also leaving all of the doors open and lights on in the house in the hopes that people won’t start unnecessarily touching things in the home.
While this was expected to be a relatively competitive home-buying season, these new developments might change things. If you are still in the market for a new home, First Fidelis is here to help you secure a home loan. Get the mortgage that you need by filling out our Pre-Approval Application today.