Is now a good time to buy a home?
29-July-2020
Let’s first clear up a misconception: the coronavirus did not kill the housing market.
Especially in the Charlotte area, the market is hot and in recent weeks we have seen a significant and steady drop in mortgage rates - even in the midst of a pandemic.
All signs point towards a housing market that is not only weathering the coronavirus storm but showing consistent signs of growth.
With that said, many have been asking us on social media if now is the right time to buy a home - so let’s get into the nitty gritty.
Looking at the numbers.
After an initial scare in April due to coronavirus shutdowns, mortgage rates have started to drop again as the market is experiencing a steady rebound.
To give some perspective, last month at this time, mortgage rates were at 3.39% for a 30-year fixed rate mortgage and reached as high as 3.72% on January 2 of this year. That same rate has now dropped to 3.15%. Similarly for a 15-year fixed mortgage, rates have dropped to 2.72% (Tuesday, July 21), a .02% percent drop from the previous week.
These seemingly insignificant dip in points can have a huge impact on your monthly payments, potentially saving you up to $100 a month.
Mortgage applications have increased as well, rising 5% during the first week of July. According to the Mortgage Bankers Association’s index, mortgage applications are 33% higher than this time last year.
So people are buying homes - but is this the right time for you?
Selling is easier than ever.
For many, purchasing a home will be contingent on selling their current one. Good news for current homeowners - the forecast for selling your home is better than it has been in recent years.
Many sellers removed their homes from the market during the pandemic, making inventory tight. So putting your house on the market now gives you a good chance of it selling quickly and getting a good price. This is especially true in the Queen City as houses are selling quicker than ever.
Be careful, though. As many homes are being snatched up quickly. Ideally you’ll have found your new home to settle into before having to move out of the old one.
What if I’m a first time buyer?
Starting from scratch? That’s okay too. For many first time buyers, one of the greatest obstacles is the down payment. Thankfully there are many down payment assistance programs (DPA) that can help you get a low rate and most have stayed open and available during the pandemic.
Now let’s talk about interest rates. Unless you have a huge cash reserve stored away somewhere, you’re going to need low interest rates.
Most first-timers making the decision to buy say they are doing so to take advantage of historically low interest rates. If you have employment and an OK credit score, now is a great time to buy, according to experts.
One piece of advice for buying in the current climate is choosing a fixed mortgage rate. According to Barbara Friedberg, MBA at Robo-Advisor Pros, “With interest rates at the lowest level in decades, if you’re in the market for a home, now is a good time to buy … Just remember to lock in the low rates with a fixed rate mortgage. You'll find mortgage brokers attempting to sell you a variable rate - but stick with fixed to lock in the low rates. Also, depending upon the competitiveness of the real estate market in your region, you may be able to negotiate a lower price.”
In conclusion …
Buying a home is a major responsibility. That’s why it’s important to take advantage of low interest rates and down payment opportunities so that you can get the best investment possible!
For the time being, the housing market seems to be on a positive trajectory - some good news in what’s been a year of dark headlines.Our thoughts? If you’re looking to build or buy your dream home, now is the time.
Looking to move to the Queen City? At Casanova Homes, we’ve got you covered. Contact us and talk to someone one-on-one about how to make your dream home a reality. Now is the time!
Sources:
https://www.cnbc.com/2020/07/08/homebuyer-mortgage-demand-spikes-33percent-as-rates-set-another-record-low.html?utm_source=morning_brewhttps://www.chicagotribune.com/real-estate/ct-re-down-payment-assistance-covid-19-tt-0710-20200713-adis2id54nc5djw46v4upejgwi-story.html
https://www.forbes.com/sites/jrose/2020/07/07/mortgage-rates-reach-record-lows--is-now-the-right-time-to-buy-a-house/#376351b43de7
https://www.bankrate.com/mortgages/rates/mortgage-rates-for-monday-july-13-2020/