The Impact of COVID-19 on Buying A Home
The effect of COVID-19 on various sectors of the economy is quite significant. That is quite evident with news about stock market volatility and a rise in unemployment numbers making rounds. Everyone is cautious for various reasons, especially when it comes to buying and selling. However, the pandemic is presenting opportunities as well.
For instance, potential home buyers have something to smile about when considering the current prices. That is because becoming a homeowner now is more affordable than during the pre-pandemic period. Here is some insight into the impact of COVID-19 on the cost of buying a home.
Current Home Sales
The existing-home sales data focuses on closing transactions for single-family homes, co-ops, townhomes, and condominiums while excluding new home construction. The National Association of Realtors (NAR) provides data on these sales every month. Following the stay-at-home orders, most people have remained indoors for the most part. That is one of the reasons why seasonal home sales on an adjusted basis continue to decline since February 2020.
Additionally, after the commencement of the economic shut down in March 2020, home sales have continued to decrease.
Existing Home Prices
The median existing-home price for all types of houses as of April 2020 was down 8%. Note that the median price refers to home prices and not the average to prevent outliers from skewing the data. The sharp drop in home prices post COVID-19 continues to cause ripples in the housing sector. Although there is a rise in the sales prices of homes at present, the change is not statistically significant.
It will take time before the economy truly rebounds. This implies that you should not expect an exponential rise in house prices in the near term. The reason is that economic lockdowns are causing temporary disruptions in the case of home sales and prices as well. On the other hand, the listings on the market are attracting buyers and boosting home prices too in some areas.
All things considered, record-low mortgage rates will most likely remain in place for the rest of the year. Also, these rates will continue driving housing demand as state economies continue to reopen steadily.
- -According to NAR, 42% of buyers and 51% of sellers are willing to delay the process of venturing into the volatile real estate market because of the present situation.
- –The drop in total listings in the period ending May 2 stands at 19% annually, and that of new listings is at 39%.
- -Home sales fall by 21% in April in Charlotte, and this drop is larger than that of June 2009, according to The Charlotte Observer citing data from the Canopy Realtor Association.
- -Myrtle Beach sees a rise of more than 3% in single-family home sales in the first few months of the year 2020 as per a report by Myrtle Beach Sun News, citing the Coastal Carolina Association of Realtors. There is also a 3.6% rise in sale prices.
Conclusion – Should You Buy Now?
The pandemic is affecting existing-home sales while the median price is getting a boost as a result of lower mortgage rates. As much as that is the case, it is not yet clear whether this trend will continue or not. The real estate market plays a huge role in the economy, and its strength or weakness can avail insight into the overall health of the consumer.
So, if you are planning to buy a home, the pandemic is presenting an opportunity for you to become a homeowner. Currently, buyer competition in the housing market is down because many are not ready to take the risk. Additionally, low-interest rates on mortgages are attracting potential home buyers, and that is a chance worth seizing.
The bottom line here is that now is an excellent time to buy a home because you stand to own your dream house for less than before and with incredible interest rates to keep payments down. Search for homes or get connected with a top local expert agent or get pre-qualified as an ideal next step now!