Spring normally ushers in the busiest time of year for the residential real estate market, but this year is different from any other in recent memory. The Coronavirus and social distancing measures intended to fight its spread are changing almost every aspect of our lives and home sales are no different. There will be some potential sellers that are no longer comfortable with the idea of strangers walking through their homes, and many others who would have been in the market for a home are now not as confident in their long term financial situation, and may decide to wait for such a large purchase.
A recent article in Curbed magazine highlighted what we can expect from the housing market over the next few months. We began this uncertain time with historically low inventory of available houses on the market, and mortgage rates were already quite low. Now the Federal Reserve has responded to the Coronavirus pandemic by cutting interest rates. One effect this has is lowering bond yields, and traditionally, when bond yields are lower, mortgage rates are lower as well.
With supply already at all time lows, you can expect still fewer people to feel comfortable putting their homes on the market. But buyers are still out there. The lifestyle and job changes that necessitate moves are still happening, and even in full-blown recessions, which we aren’t even close to, the housing market is surprisingly durable. By studying previous pandemics, one can see that while fewer houses are sold, prices stayed pretty much the same. And, the federal government has placed a moratorium on foreclosures, which should protect us from the problems of 2008 when the housing market was heavily impacted.
To read the full article in Curbed magazine, click here!