As different sectors of the US economy grind to a halt because of the coronavirus pandemic, what happens to the housing market? Will COVID-19 also freeze the real estate industry? Here’s what we know and what we can anticipate over the next couple of months.
- Mortgage rates are lower than ever
Even before the pandemic started, mortgage rates have slowly been decreasing. So far, it has plummeted by 3.8 percent. It remains to be seen if we can expect mortgage lenders to lower their interest rates even further as the coronavirus pandemic continues to sweep the country.
- Home sales will slow down
This time of the year is typically considered the peak season for home buying. It usually begins around March and ends just before school starts. But this year, because of stay-at-home orders and social distancing guidelines, this isn’t the case.
There are two scenarios we can expect once the outbreak passes. First, home sales will drop sharply and then recover fast for the remainder of the year. Second, there might be a gradual decrease in home sales for a longer period of time, and then a gradual increase by the end of the year.
- Supply lines are disrupted
Another effect of the COVID-19 pandemic is that borders, as well as some supply lines and businesses, have closed. What does this mean for US real estate?
It’s simple: there might be some time before we can expect any finished new residential developments. Construction will be slowed down or postponed until the outbreak passes.
The home building industry might also struggle to recover post-COVID-19. But for now, home builder confidence remains high.
- There will be less homes in the market inventory
Understandably, some sellers from across the country are postponing their sales and pulling off their listings in the market. This will result in a decrease in the U.S. housing supply.
As of April 4, the U.S. housing inventory has also dropped by 31 percent when you compare it to last year’s figures. It’s expected that the number will continue to decrease as the months progress.
Is it a good time to buy or sell a home?
It’s not the best time given the social distancing guidelines and the stay-at-home orders. That said, the best time to buy or sell a home is always when you are ready.
If you do decide to buy or sell your home during this time, make sure to observe the rules and safety regulations in your community. Stay at home as much as possible, search for properties for sale online, and communicate with potential buyers and sellers through trusted channels.
For more tips on how to buy your next home or sell your home during the COVID-19 pandemic, browse our blog. We have excellent resources covering these topics.
Marco de Longeville Luxury Realty will continue to entertain your real estate needs. Whether it’s buying an investment property or exploring homes for sale in Malibu CA, we’re here to help. Connect with us today at [mail_to email=”email@example.com”]firstname.lastname@example.org[/mail_to] or 213.675.0197.