The coronavirus sweeping the nation has also swept the housing market off its feet. Mortgage rates have been dropped to ideal levels to help potential buyers with their purchases, and thereby slightly boosting the economy.
Even before the pandemic, rates were already sliding downwards due to the Federal Reserve pushing policies that were aimed to help the economy. Rates are favorable today, according to mortgage buyer Freddie Mac, the mortgage rate on a 30-year mortgage was around 3.18% last week.
Now, with COVID-19 in tow, rates are projected to fall even more, home listing site Realtor.com is predicting them to fall below 3% later this year. United Wholesale Mortgage announced a loan program with a 2.5% rate for purchases and refinances just earlier last month.
The negative side of the event lies with those who have lost employment and can no longer qualify. Lenders are very focused on employment verification and are now checking employment status multiple times throughout the process. Additionally most lenders are turning away anyone who has asked for forbearance.
Currently due to the troubled economy there are currently lots of sellers and buyers in the market. When the economy recovers and rates begin to rise again the housing market is likely to get much hotter.
As things improve the distressed sellers will decrease. Additionally new home construction had come to a stop and is only slowly starting up again, and institutional investors, groups that purchase single-family buildings in large quantities intending to furnish them into rentals have been very busy.
With these factors, there will be little housing inventory left after the pandemic, further driving up already-high home prices.