The Impact of the COVID-19 Outbreak on Housing Market
This year is getting unpredictable in a hundred ways. All the market projections and estimated growth rates have dramatically fallen as the global pandemic. Unfortunately, the cases are increasing at a higher rate than before. US state coronavirus hit the humankind in one of the worst ways ever. We are in September 2020, and the Worldwide death rate from coronavirus has reached 191,057+. UnNew York has reported 469,215 cases, California is at 726,377. At the same time, the state of Massachusetts has reported 121,545+ cases so far. These unstoppable cases have put the economy & human life at stake.
Many experts are analyzing and comparing the effects of Inflation & Coronavirus. However, one thing is obvious- Coronavirus has been more damaging than what the experienced in 2008 during Inflation. It’s been a difficult time for the Real Estate & Mortgage businesses like many other business sectors. The outbreak had a significant impact on people’s income sources. Million of Americans are filed for unemployment since March 2020.
For people who were in the middle of the house buying process, the decision was tough. Most of them have either quit the deal or have put it on hold. The uncertainty of the pandemic cure has made people more conscious about their high-end investments. Some experts were projecting a severe fall in real estate prices. Well, these projections were partially correct, and the variables for the analysis were the location and the coronavirus impact. In Massachusetts, the housing purchase is subtle. People have invested in single-family homes more. The prices didn’t shoot up for the matter of the fact that the market is not at its strongest best right now. In fact, people preferred selling a home on the market rate or even a bit less.
As far the buying behavior is concerned, the search trends for the home, real estate, and mortgage-related terms have gone down. The website traffic for popular property websites has decreased by 30-40% or more. This is evidence that people’s interest in home purchase & mortgage services is comparatively low. It will take some time to get back into action with the same or better profits.
The Federal Government also took steps to protect its citizens’ economic balance in these challenging times. They implemented a foreclosure moratorium and directed Mortgages companies to reduce payments backed by the Federal Housing Administration (FHA), Fannie Mae, or Freddie.
Mac. This moratorium step can be a big risk for financial services as the future may pop out more bankruptcy and missing on-time payment cases.
Whatever the case is, the decision is taken for the good, and we, being mortgage lenders in Massachusetts, have abided have by the norms.
The mortgage rates are low because of the less market demand and risk investment in the stock market. People right now are uncertain about investing in stocks—the next best alternative bonds. As the bond price increases, the interest payment falls. However, this inverse relation is not stagnant. There have also been times when both bonds & mortgage rates were on the lower side. So, predicting the rise of mortgage rates has multiple factors in the account.
On the positive front, Home buying is not a luxury for everyone. Some need it. For instance, a family is getting bigger and need a spacious home to accommodate everyone perfectly. In this case, the need for a house is inevitable. The family may delay the purchase, but ultimately, they will buy one. So, the lower demand & stagnant pricing are a matter of some months. Eventually, the housing market will get back into traction. The mortgage services will be more strict with their terms & verifications to ensure no further loss.
In the end, coronavirus has impacted the housing sector & mortgage services. The shift in buying behavior and moratorium risks may increase homebuyers’ difficulties for approvals in the future. However, the boat is not sinking soon. Homebuying is a need, and nowadays, a mortgage is a medium to fulfill the basic human needs. If you can afford homebuying with hampering your finances, go for it as the prices are either stagnant or its lower best. You can connect to Drew Mortgage. We are one of the leading Massachusetts mortgage companies. You will get the best mortgage assistance and suggestions with us even during these unprecedented Covid-19 times. Connect soon!