Buying a House in Today’s COVID-19 Summer Market

If you’re anything like the rest of the country, the roller coaster of the recent pandemic has significantly affected your life. With high rates of unemployment, loss of income and an impacted economy, many potential home-buyers regrettably watched their opportunity to purchase drift far away.

Or so it seemed. Recently, however, with business re-openings, increased incomes, and returns back to work, the market shows significant signs of improvement. According to this Fannie Mae article, “Heading into the summer, the housing market is clearly rebounding faster than expected with a recovery in purchase demand and muted home price response due to the economic downturn. . .  our outlook for the housing market is cautiously optimistic.”

If you’re in the market to buy your first home, purchase a bigger home or down-size, the summer market is hot and ready for eager purchasers. With the impact of the coronavirus still at play, you may want to know if buying a house during COVID-19 is a good decision. If that is you, here are two leading indicators to watch.

Mortgage Rates: Low, Affordable, Advantageous

When purchasing a home, your search goes beyond finding the best neighborhood, school district and number of bedrooms. While square footage is important, it’s just as important to find the best mortgage rate. The rise and fall of mortgage rates deeply impacts a home-buyer’s ability to purchase. Fortunately, buying a house right now is highly encouraged.

Though the coronavirus pandemic has negatively impacted the economy, its fortuitous side has put home-buyers in an advantageous position. Today, mortgage rates have hit an all-time record low. If you have financial stability in this uncertain time, then now is the time to buy.

Housing Market: Inventory, Availability, Pricing

In March, when the lockdown was put in place, potential homebuyers paused their scrolling through real estate apps to view new listings. In-home showings were stopped and both buyers and sellers froze out of caution and fear. The real estate market was hit hard when the flow of eager sellers and buyers abruptly stopped.

When virtual tours became available and COVID-19 safety precautions were put in place, doors opened back up, helping the process of purchasing. The National Association of Realtors (NAR) expects home sales to climb as in-person showings return. With the nationwide lockdown, May’s existing home sales fell 9.7% from April and 26% annually.

Fortunately, the housing market is on an upswing. Pending home sales were up in May, spiking a record 44.3% over April, beating expectations of a 15% rise (sales numbers were, however 5.1% lower than last year).

However, inventory of homes for sale continues to hold back the housing market. The supply of existing homes in May was nearly 19% lower than last year according to NAR.

What Matters Most in Today’s Housing Market

One thing that remains certain is that the impact of the coronavirus remains uncertain—especially with the rising new hotspots. “Emerging virus hot spots in the South and West could derail the improving trend,” said Danielle Hale, chief economist for realtor.com. “For now, demand remains resilient, but we’re watching the new listings trend as it’s a good indicator of what’s ahead for home sales.” 

Many households have lost income while others have not been negatively hit at all. Some of the self-employed have experienced gains, while others have had to close their doors. In this particular season of time, there are no blanket rules; it truly depends on your specific situation. As always, your financial stability should be your primary influence in determining your ability to purchase during this unprecedented time.

What matters most for buying a house in today’s COVID-19 summer market is that what might not be best for others, may be best for you—and this could potentially be the best time for you to buy.

Looking for the steps in a mortgage process? Go here.

We can help you figure out what is best for you. Give your loan officer a call, or find a loan officer to help today.