We saw housing demands go somewhat silent during our current health crisis. But according to Redfin, demand for home buying is back up. In fact, it’s now above our healthy pre-coronavirus level. Is this just wishful thinking and exuberance that has been fueled by too much time in our current surroundings with the same people, day in and day out?
Heading Back into Growth Mode
According to Redfin, demand fully moved out of recovery mode headlong into growth mode during the week ending May 17 at 16.5 percent higher than it was pre-pandemic adjusting for the season. They cite this recovery as partly due to our current record low mortgage rates right now. Other factors were that prospective buyers who could still qualify were ready to get out of a two-month quarantine when these rules eased.
Low Mortgage Interest Rates a Good Stimulation
With interest rates hovering at or below 3 percent, the housing market has found new stimulation. The Federal Reserve has come to the aid of institutions with rate cuts that have enabled them to finally reflect this in their own mortgage lending. This helps offset housing prices that had increased exponentially over the past few years, keeping many Americans from being able to afford homeownership.
Unemployment Had Little Effect on Demand
Even with unemployment rates at the current level, it has not had much effect on home buying demand as we speak. What we are seeing is that current inventory is not keeping pace with demand. In fact, inventory has dwindled, now down by 24 percent compared to May of last year and most sellers are not having to reduce their selling prices to entice buyers. Many real estate professionals agree that inventory will be the biggest concern for the remainder of the year and maybe even beyond.
Sellers Still Not Sure
In the meantime, many sellers are keeping their expectations low with home prices flattening somewhat from those highs of just a few months ago. According to some experts, home sellers are still staying on the sidelines, taking a wait and see approach. In normal market conditions, during a period of low inventory, prices could be expected to keep escalating. But like all other things during this pandemic, things have been anything but “normal”.
Refinancing is a Great Option Now
For homeowners who have decided to stay put, refinancing now with the current mortgage rates as they are may be the perfect solution. Depending on the borrower, how a refinance translates will be different from person to person. But in many cases, it can mean substantial savings over the life of the loan. As many people are wanting to take advantage of the current low interest rates, mortgage professionals have seen an increase of over 200 percent in mortgage refinance applications in some areas.
If you are considering taking advantage of today’s low interest rates for a new home purchase or refinance, call our certified professionals at Florida State Mortgage Group, Inc. today at (954) 359-3000 to see how we can help you. We serve Ft. Lauderdale, Broward County and throughout the entire state of Florida.