With spring quickly drawing to a close, we have gathered enough information to forecast what the home buying season may bring this year. Historically, spring has been considered the “home-buying season”. However, COVID-19 continues to keep some anxious buyers on the sidelines. While many buyers and sellers were quick to adapt to virtual tours and other social distancing practices, others elected to wait out the pandemic to resume their real estate plans. Now that states are reopening and restrictions on real estate practices are easing up, there are reasons to believe that we are poised for a strong summer home-buying season.
Low mortgage rates continue.
With various restrictions being lifted throughout the U.S, buyers are enticed to reenter the market due to low mortgage rates. According to a report by the Mortgage Bankers Association (June 10, 2020), applications for loans to purchase a home increased 5% last week from the previous week. This percentage is an astonishing 13% higher than a year ago. As it stands, the average contract interest rate for a 30-year fixed mortgage is sitting at 3.38%. Americans are eager to take advantage of these rates while they still last. We should expect more people to jump aboard the low mortgage rate train as we progress through the summer months.
Home purchases are a safer investment right now.
Due to recent volatility, the stock market is causing even the most experienced investors’ heads to spin. People are concerned that the stock market will crash once again and are starting to pull their money to avoid losing capital. We can also predict a busy summer home-buying season because people want to put their money in safe and steady investments. With questions about the economy, people may feel better about putting their hard-earned money into something tangible like a home, rather than other investments this summer season.
Increasing employment means an increasing number of home searches.
According to the Bureau of Labor Statistics, the economy gained 2.5 million jobs in May 2020. This was the first time since February that jobs have been added. As more Americans go back to work this summer, more people will be searching for homes. Understandably, the job uncertainty has been keeping some buyers from moving forward with their home search.
People will be more comfortable with social distancing practices.
Nobody knows with certainty when we can stop practicing social distancing. For many Americans, avoiding crowds, maintaining a six-foot distance from others, and wearing masks in public have all been challenging adjustments. While restrictions will vary from one state to the next, it is fair to say that Americans are becoming more accustomed to social distancing precautions. Buyers who were once uneasy about attending in-person showings may feel more comfortable as more time passes.