During the current health crisis, 53% of homebuyers still want to purchase a home within a year. Lending Tree recently conducted a survey asking over 1,000 prospective buyers why they are planning to purchase in the next year. The survey revealed several key factors that are encouraging homebuyers to purchase amid the pandemic.
The most obvious, are the low mortgage rates which enable many potential homebuyers to purchase a higher-priced home. This month marks the third consecutive week of low mortgage rates hovering in the low 3%. According to Keeping Current Matters, a company that provides real estate market insights and tools shared the historic mortgage rates by decade. When the Primary Mortgage Market Survey began in the 1970s the average rate was 8.86%, in 1980 the average rate was a high 12.7%, in 1990 the average rate was 8.12%, in 2000 it dipped to 6.29%, lowered to 4.09% in 2010 and dropped to the lowest in 2020 at 3.21%.
“As the economy is slowly rebounding, all signs continue to point to a solid recovery in home sales activity heading into the summer as prospective buyers jump back into the market. Low mortgage rates are a key factor in this recovery”, said Sam Khater, Chief Economist at Freddie Mac.
With the “shelter in place” ordinance across the country, people spent more time at home giving them the opportunity to save money. Many reduced spending on travel, food, commuting and social events. Potential homebuyers have more money saved for a down payment and closing costs. Home purchasing is more feasible during today’s current events.
Another factor that has come out of the “stay at home” order is potential buyers are staying at home. During this time, they are re-evaluating their space and making a wish list. Buyers are looking at what they want in their next home such as more square footage, a certain neighborhood, or upgrades.
Now is the time if you are in the market to purchase or sell a home. Low mortgage rates and extra savings are prompting buyers to act with the as the country continues to phase reopenings.
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