Summer home-buying season may be much hotter than expected!
Until recently, the prognosis for the housing market wasn’t great. With the economy in a free fall, some home sellers took down their “For Sale” signs and some buyers chose to wait out the pandemic. It was like the pause button was pushed on the normally bustling spring home-buying season.
But as states reopen their economies, the summer real estate market just might turn out to be hotter than anticipated. According to the Mortgage Bankers Association,
mortgage applications in May for home purchases increased compared to May 2019, rising an impressive 8.7% as buyers raced to lock in record-low mortgage rates.
Danielle Hale, Chief Economist for realtor.com, says “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.”
“The pandemic really hit us right at the time when home-buying activity really ramps up,” says Joel Kan, economist for the Mortgage Bankers Association. That’s resulted in “a late home-buying season.”
The recovery may be due in part to more sellers listing their homes as cities and states loosen restrictions.
And, low mortgage rates are enticing buyers back into the market according to Lawrence Yun, chief economist of the National Association of Realtors®.
Plus, there is still a severe housing shortage, which has only gotten worse during the public health crisis. Sellers have pulled their properties off the market or are delaying listing until the virus is under control. That can make it tough for buyers to find the right properties.
“Buyers may be surprised by how competitive the market is,” says Hale.
This could result in higher prices this summer, as there could be more folks competing for homes than homes for sale. “Given the strength of this recovery, home prices will probably rise about 4% to 6% in 2020,” predicts NAR’s Yun.
If the coronavirus resurges in the fall and the economy continues to falter, prices could flatten or even dip a tiny bit by the end of the year. They’re not likely to plunge like
they did during the Great Recession, though, as demand is simply too high.
“We have so many millennials who are at ages when they want to settle down and they want to buy a home, and that really helps keep the market busy,” says Hale.
Give me a call when you’re considering your next home sale or purchase! https://ftcollinshomes.com/contact-us/
Source: Clare Trapasso, Senior News Editor of realtor.com®