The current economic situation has people speculating about how the real estate market will evolve as we navigate through this pandemic. For many of us it was a drastic change from what is normally a busy spring market where things were paused for lockdowns. However, as things have started to reopen and restrictions loosen there has been an uptick in mortgage applications for new home purchases already.
According to a report recently released from the Mortgage Bankers Association applications were up for the first time in over two months as buyers looked to secure extremely low rates at the end of May.
“This is a bit of a bigger rebound than I expected,” says realtor.com® Chief Economist Danielle Hale. “It’s a sign that we are going to see a delayed seasonal bump in home sales. There’s pent-up demand from people who weren’t able to get out in the early part of the spring, and we’re seeing that [materialize] now.
As states and districts are starting to progress with their phases of reopening and people are becoming more comfortable with safety precautions, serious buyers are looking to pick back up with their home searches and take advantage of the low mortgage rates. Some areas will experience a slower pace than others while there still remains to be a lack of inventory. While attractive mortgage rates are encouraging buyers, sellers now need to catch up with putting their homes on the market for sale. With the slim inventory buyers should prepare to encounter a competitive landscape when they start their searches. This in turn could foster higher home prices this summer as there could be more buyers active in the market than homes for sale.
“Given the strength of this recovery, home prices will probably rise about 4% to 6% in 2020,” predicts National Association of Realtor’s Chief Economist, Lawrence Yun.
Despite the initial strength for a boost in the come back, it is still early to make any call for how things will unfold as time goes on. We will see how things play out in real time, but for now seeing an uptick in activity is most definitely a welcomed sign.