Concerns of the pandemic’s impact began to worry buyers and sellers alike, but due to a mix of record-low mortgage rates, high demand and low inventory, sales’ of homes were at their highest levels in a decade at the beginning of COVID-19’s spread.
In March, the Feds passed a $2 trillion stimulus bill and cut the interest rate by half a point, which made it a great time to refinance or purchase a new home amid the pandemic’s pending impact on economic activity. The stock market also showed concern during this time and it tumbled into a bear market, or a market transition from widespread investor optimism to overall fear and pessimism. Loan officers and mortgage companies began to transition to touch-less transaction coordination and home closings while real estate brokers and companies began to transition to the global new normal.
Construction has definitely slowed and supply chains have been disrupted, causing schedule slippage for existing construction projects, while stops and delays occurred on proposed ones. Pent-up demand from low inventory of homes on the market at the start of the pandemic will provide an environment ripe for activity once COVID-19’s numbers subside and public ease returns.
Home prices began to rise as the market continued to respond to high demand; low inventory and low mortgage rates are fueling strong purchase numbers while year-over-year real estate buys have increased by 24.7% for single family homes and 19.2% for condos and townhouses. Housing inventory will remain marginally low from COVID-19 concerns; however, once seller comfort is increased as the global pandemic subsides, we will see an increase in inventory and subsequently an ease in home prices.
If interested in purchasing a home during the pandemic, lean on loan officers and real estate brokers who have strong digital tools in place to create a touch-less experience. This will certainly meet the need for new real estate acquisitions and dispositions during a time of global unrest and strained economic activity.