Everywhere you go, you hear about the Coronavirus. A month ago we heard about it in central China, and now it's already made it's way over to the United States.
Believe it or not: the Conronavirus impacts the Housing Market! How so? Let's take a look...
MORTGAGE RATES DROP
When news broke about the Coronavirus spreading worldwide, the stock market panicked, and subsequently dropped. It seemed like the DOW was dropping 1,000 points per day. In turn, this had a huge impact on mortgage rates, as those dropped too.
How big did mortgage rates drop? Let's rewind the clocks....
Just over a year ago in late 2018, mortgage rates were pushing 5%. Fast forward to middle 2019, and mortgage rates had dropped to the 4% range. Historically speaking, 4% is a low interest rate and a pretty good rate to have. (I remember when 6% was a "good" rate back in the early 2000's).
Today, on a 30-year fixed rate, you can get a rate in the LOW 3% range. Rates have dropped a full 1% over the last 6 months, and almost 2% over the last 14 months or so!
On a $250,000 mortgage, a 1% interest rate drop can save you $140 per month. That's $1,680 per year, and $50,400 over 30 years!
The spring market tends to be the busiest time of the year in real estate... When you pair these low interest rates with a busy spring market season, it can send the market into a frenzy.
More buyers will want to act now, as rates are at all-time lows.
And more sellers will want to put their homes on the market, to capitalize on more buyers being available. In turn, sellers might even raise prices or over-price their home. Knowing that buyers can afford more.
It's a crazy market right now, and now more than ever you need a good realtor in your corner so you know what's going on, and how to make the best decisions possible. Give me a shout if you have any questions about buying or selling a home in 2020!
Managing Broker, Realtor, Owner