It’s no secret — COVID-19 has disrupted every aspect of our lives. And the mortgage industry is not immune from this global pandemic. But what will the long-term impact be? It’s a question that many are asking, but not many have a good answer to (yet).
Mortgage rates remained near another record low for the third straight week. If a new low comes, it may not be because the U.S. housing market is struggling.
The 30-year fixed-rate mortgage averaged 3.31% during the week ending April 16, a decline of two basis points from a week ago. A year ago, the 30-year fixed-rate mortgage averaged 4.17%.
The average rate for a 30-year home loan dropped to an all-time low of 3.29% in early March as concerns regarding COVID-19 began to be more prevalent.
The 5-year Treasury-indexed hybrid adjustable rate mortgage fell six basis points over this last week, averaging 3.34%. Meanwhile, the 15-year fixed rate mortgage increased three basis points to an average of 2.8%.
All of that to say this — there are some positives in the market, but those aren’t present without a significant amount of uncertainty.
I saw a quote recently from Freddie Mac’s chief economist, Sam Khater, that I thought was interesting.
“Undoubtedly, the housing market is facing its greatest challenge in over a decade as our nation weathers this unprecedented economic event. Although the uncertainty of the crisis means forecasts of economic activity are more unclear than usual, we expect that most of the economic damage from the virus will be contained to the first half of the year.”
With the prospect of getting back to “normal” sooner than later, what can you be doing right now if you’re looking to get into your first home or maybe upgrade?
1 — Look at virtual home tours.
There are plenty of realtors working through the COVID-19 challenge, and you should have no problem finding opportunities to continue to gather information about homes available in your area.
2 — Work to solidify your financial outlook.
I know this is a challenging time financially for some. But for some, this presents a chance to get your finances together. Most are spending less money from week to week given the decreased activity. If you are a fortunate one whose income hasn’t changed, store those extra dollars away for a downpayment or to pay off debt.
3 — Contact a local Loan Officer.
I am talking to people everyday who are reaching out to gather more information. They know rates are low, but aren’t sure how that impacts them. That’s where we come in. Give me a call or shoot me an email (firstname.lastname@example.org) today and I can help you work through your options in the current environment.
Our community is resilient and we will get through this season of struggle! Stay strong and keep fighting for yourself, your family and those around you.