The current economic situation has everyone wondering about how the real estate market will progress as we navigate through this pandemic. For many it was quite a change from what is normally a bustling spring market where things were put on hold for lockdowns. However, as things have begun to reopen there has been an increase in mortgage applications for new purchases already.
According to a recent news from the Mortgage Bankers Association applications were up for the first time in more than two months as buyers looked to lock in 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 loosen up restrictions and people are becoming more comfortable with safety precautions serious buyers are looking to resume with their home searches and take advantage of the low mortgage rates. Some areas will see a slower pace than others while there still remains to be a shortage of inventory. While desirable loan rates are encouraging buyers, sellers need to catch up with listing their homes on the market for sale. With the inventory as low as it is, buyers should prepare to encounter a competitive landscape when they begin their searches. This in turn could result in 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 go as time goes on. We will see how things unfold in real time, but for now seeing an uptick in activity is most definitely a welcomed sign.