In just a few short weeks, the COVID-19 outbreak has changed our lives and raised serious questions about the future. The Federal Reserve Bank has slashed interest rates to zero (among other actions) to try to lessen the economic damage of business and job loss. A zero interest rate also can result in mortgage rates that are at or near an all-time low.
That creates a question about buying a home in the time of COVID-19: should you buy now to take advantage of low interest rates, or wait until there’s more certainty in the world?
What Are Other People Doing About Buying a Home in the Time of COVID-19?
Spring is prime home buying time, but COVID-19 is causing a mix of positive and negative reactions in the real estate market.
USA Today reports on Millennial homebuyers in California who have decided that economic uncertainty trumps the low current interest rates. Although actively looking for a house until a couple of weeks ago, they’ve stopped until they feel more positive about their jobs, 401(k), and their health.
At the same time, some mortgage professionals say they’re busier than ever with both new and refinanced home loans. Real estate agents are seeing savvy first-time buyers who want to take advantage of the low interest rate situation, according to Forbes.
The advantage of owning real estate
Real estate remains a solid investment with proven appreciation over time. Historically, homes increase in value every year nationwide. In times of economic downturn and unstable stock markets, consumers as well as investors often put their money into purchasing real estate – they know it has multiple streams of revenue:
- Tax advantages,
- Potential cash flow from rental income, and
- Appreciation/loan principle pay down that increases the amount of cash in the property
What to Do About Buying a Home in the Time of COVID-19?
Lots of mortgage bankers, including ours at Capital Bank Home Loans, are still working hard and have an entirely digital, paperless process with no need to leave your home. If you are keeping up your housing search, or want to get started as soon as quarantine measures are no longer being taken, this is the perfect time to get pre-approved to buy a home in the time of COVID-19.
There’s no one right answer for everyone. If current world concerns make you put house hunting on hold, there are opportunities to learn more about real estate investments for when you’re ready to restart your search – such as watching podcasts, attending webinars, and talking with a knowledgeable mortgage professional.