As a real estate investor, you’re probably eager for new information about COVID-19’s impact on the housing market. With fluctuating shifts in the market, investors need to stay on top of what’s going on. Here are a few updates regarding COVID-19’s effect on the real estate industry.
Interest rates are lower than ever
As of June 1st, the 30-year fixed-rate mortgage is hovering around 3.38%. For perspective, this rate was around 4.1% precisely one year ago. This decrease in interest rates could represent a great opportunity for buyers eager to finance properties using a mortgage.
Growing role of technology is here to stay
A benefit emerging from the impacts of COVID-19 is the growing role technology has played in ensuring real estate investors can continue buying properties safely without breaching social distancing guidelines. For example, virtual tours give buyers access to an interactive 3D layout of select properties so they can view them on Hubzu.com.
Hubzu is also facilitating the online home buying process by allowing buyers to browse, bid and start their purchasing paperwork entirely online. If buyers feel like they must visit the property in person before moving forward with a purchase, Hubzu has equipped several properties with self-showing lockboxes that allow people to tour them on their own.
Sellers should note that the current levels of consumer confidence are a direct result of the pandemic. It’s a temporary occurrence that will likely return to normal once the quarantine subsides. As Americans return to work and see the economy stabilizing, consumer confidence should come back and the housing market will benefit from new buyers.
New home sales
During March, the sale of new single-family homes was at a seasonally adjusted rate of 627,000. This is below the February rate of 741,000 homes sold and is also below the March 2019 estimate of 693,000 homes.
Similar to consumer confidence, sellers should keep in mind that March’s new home sales are due to short-term setbacks caused by the COVID-19 pandemic and that home sales should rebound as cities and states start opening back up.
Median home sale prices
For all new homes sold in March 2020, the median sales price was at $321,400 while the average sales price sat at $375,300. Lawrence Yun, the Chief Economist for the National Association of Realtors, stated that “home prices appear to be rising just as if we were in a pre-pandemic period.” This statement should reassure both buyers and sellers that the worst effects of the pandemic on real estate are likely behind us.
Foreclosure moratorium delaying the buying season for investors
The foreclosure moratorium has been extended to June 30th and is another factor contributing to the temporary drop in real estate purchases. The CARES Act states that no federally backed mortgage loan servicer is allowed to execute an eviction or foreclosure sale beginning on March 18th and will last until at least June 30, 2020.
Real estate investors can look forward to lower than average interest rates, as well as the knowledge that this is a temporary decline and the market will likely pick back up once the quarantine ends. For more information regarding the housing market, as well as the ability to browse, bid and close on properties online, visit Hubzu.
And for additional resources to help you navigate the real estate market, visit our COVID-19 resource hub by clicking here.