Back in 2008, when our economy crashed, the housing market was solely to blame. With the use of subprime loans, many borrowers defaulted on their mortgages causing a deep recession that we were just getting out of until Coronavirus hit.
Now, the tables have turned in 2020. Housing may be able to save our current economy.
Corelogic’s Frank Nothaft says look for housing to rescue the economy. There is pent-up demand and a shortage of inventory leading to a stimulation for building. At the same time, mortgage rates continue to remain historically low. Last week, the average 30-year fixed-rate mortgage was at an average of 3.23%.
The Federal Reserve stepped in to help with this fiscal policy and it looks to be cushioning the pandemic blow. It will be interesting to see how they continue buying Mortgage Backed Securities to stimulate our economy while many stay-at-home orders are being lifted.
Currently, in the housing market, sellers are holding off rather than putting their homes up for sale. Realtor.com reported that for the week ending May 2, total home listings were down 19% annually and new listings were down 39%. On the other side of the coin, the MBA Mortgage Purchase Application rose 7% this past week, signaling that home buyers are out there and motivated. Buyers are ready, sellers need to make moves.
Coronavirus has dramatically slowed the normally busiest time in the housing market. As cities start opening back up to normal operations, that means more people will have jobs and will be able to buy homes or refinance their current mortgage. We hope to see a swift change for the better as consumers start feeling more confident with their money and financial situation.
To be prepared for this wave of home buying, selling and refinancing, we suggest you get pre-approved. This will help you jump on situations that will be beneficial to you.
Please reach out to us today to start the conversation: Ken Thayer, President of Residential First Capital – firstname.lastname@example.org