The COVID-19 pandemic has caused unprecedented and wide-spread disruption to economies, industries and everyday life since early spring. The housing and mortgage industries have not been immune to these tumultuous times, but thankfully both have displayed the utmost agility by quickly adapting.
Because of the extraordinary nature of these times, it is hard to predict the long-term ramifications of the COVID-19 virus. No one knows for absolute certainty how the virus will impact the remainder of the year, but here are a few predicted trends:
Refinance Surge Decelerates
At the beginning of the pandemic, lenders were inundated with refinancing applications from homeowners incentivized by the record-low interest rates. Now that rates appear to be holding steady, it’s expected for refinancing applications to dwindle as customers who were eager to refinance already did so when rates began trending downward.
The unpredictable climate fostered by the virus has many not eager to make any major financial decisions, including current homeowners. Because many owners are electing to stay put, there are fewer listings available and a market with inadequate inventory, coupled with an increase in demand, equates to a market that will continue to favor sellers. A sellers’ market implies the probability of rising prices, bidding wars, swift decision making and less negotiating power from the buyer’s perspective.
Historically, the end of the year isn’t the most popular time to purchase a new home, but the end of 2020 might prove to be uncharacteristically busy. Obviously, many prospective buyers adjusted plans and timelines due to growing uncertainty at the onset of the pandemic. However, as everyone adapts to the new normal, the housing industry will likely witness a significant rebound this winter as many previously sidetracked plans recommence.
Evolving Buyer Preferences
The far-reaching and surprising impacts of the pandemic are beginning to show themselves in the housing industry. As the world recalibrates and adjusts to a new way of life, the buyers’ needs have also shifted. Many professionals find themselves unexpectedly working from home meaning commute times are no longer a concern, but home office space sure is. The freedom a virtual environment offers has many escaping expensive city life for the suburbs and this migration will invariably impact pricing.
If you’re eager to learn more about these anticipated trends or discuss our array of home loan solutions, contact a PrimeLending home loan expert today.