Not long ago, the housing market was booming, thanks to a strong job market and low mortgage rates that enabled the buyer to turn to real estate. However, at the turn of the year, something unpredictable in the form of a pandemic occurred and erased all housing market confidence.
Looking at the speed at which homes were in demand as compared to inventory, we saw new record sales in February. In one of Realtor.com’s report, it was mentioned that although April saw a big dip in sales, February still managed only a small decline since October last year.
From late 2019 to early 2020, due to lower mortgage rates, a substantial housing market activity initiated. However, come February, early signs of coronavirus spread took its toll mainly on markets that were severely hit hard by the outbreak.
Higher unemployment and vanishing wage growth will also make its worth on the housing demand.
As an investor who is interested in real estate, there may be turbulent times ahead, as full effects of this crisis remains to be seen. However this is what we are sure of:
Low interest rates – This is excellent news for investors as lower interest rates makes financing affordable for investors. The low interest rates present an opportunity for you if you are an investor. For instance, adjust your real estate portfolios in an attempt to boost returns and protect yourself against risk.
Foreign Buying – Investors often move to invest in US housing market to experience stability and better returns. For instance, due to lack of confidence in varied asset classes such as stocks, commodities and bonds, investors take advantage of lower housing prices.
It is hard to deny that real estate market is one for the long-term. Investors are still sitting on cash and waiting for the right opportunity to buy or rent at the right price. Amid the coronavirus outbreak, some of the market fundamentals remain unchanged. Volatility still plays a part, but homeowners and buyers looking to invest will advance with their transactions.
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