Even with economic uncertainty it’s still a good time to buy or sell

Dated: October 5 2020

Views: 68

Amidst the confusion in our political climate; we also are dealing with an economic rollercoaster. Buyers, and sellers are frequently at a standstill not knowing if the time is right to make their next move. To get more insight on this topic Real Estate reporter Clare Trapasso spoke to a few experts.

According to Danielle Hale indicated Cash-strapped home buyers received a bit of relief this week; mortgage rates tumbled to a new all-time low—making those monthly mortgage payments just a bit cheaper.

The coronavirus pandemic causing an economic downturn has led to the lowest mortgage rates in history. Falling an average of 2.86% for the most common types of loan, the 30-year fixed-rate mortgage, in the week ending Sept. 10, according to Freddie Mac. The previous low was 2.88% for the week ending Aug. 6.

This is good news for buyers who are in the market now, says realtor.com®'s chief economist, Danielle Hale. "It’s going to make monthly payments lower than they otherwise would be. Buyers need that right now, because prices are rising.”

 

Even in our current situation, pandemic with economic uncertainty the median home list prices rose 10.8% compared with last year in the week ending Sept. 5, according to realtor.com data. Nationally, the median home price was $350,000 in August—a record high.

A percentage point here or there may not sound like much, however, it can determine whether aspiring buyers can afford homeownership. It can also add up to some very big savings. Even a single percentage point difference has the potential to shave more than $100 off a monthly mortgage payment and can even result in tens of thousands of dollars of savings over the life of a 30-year loan in some cases. (The exact amount will vary based on the rate and size of the loan.)

Last year, rates were about 70 basis points higher, at 3.56% for a 30-year fixed-rate loan in the week ending Sept. 12, according to Freddie Mac. (A basis point is equivalent to 0.01%.) Investors have been buying up more mortgage-backed securities, widely considered a safer investment, in response to the pandemic, and that's pushed mortgage rates lower.

That doesn't mean folks should hold their breath, expecting rates will continue to fall.

"In order to see rates, go down much further, we'd have to see the economic recovery slow down," says Hale. While she doesn't expect that to happen, she also doesn't anticipate rates shooting up anytime soon.

"They'll stay low," she adds.

The Mortgage Bankers Association predicts rates won't climb past the the mid-3% range over the next two years. It anticipates rates could eventually reach the 3.65% range only toward the end of 2022.

This offers some relief to buyers, who are having to pay more in a competitive market, says MBA economist Joel Kan.

"The low rates are helping, maybe they can afford a little bit more," he says.

Rick & Angie Decker are realtors with Local Homes and Land Real Estate. When life  pushes you into a new chapter we're here to help you enter that chapter. We have years of experience helping others meet their goals and finding their forever home. Give us a call today at 843-499-6872 or email us at rnadeckerteam@gmail.com

Reference

Trapasso, C. (2020). Mortgage rates tumble to yet another all-time low. Retrieved October 5, 2020 from https://www.realtor.com/news/real-estate-news/mortgage-rates-keep-falling-new-lows/

Rick & Angie Decker, Realtors
843-499-6872
Email: rnadeckerteam@gmail.com

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Decker Team

Rick and Angie Decker work together as The Decker Team and they specialize in both Commercial and Residential real estate.. Angie entered real estate part time in 2016 while also working as an Operati....

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