Buying a home remains an important aspect of the American Dream for many people. But how has the pandemic affected that dream? The COVID-19 pandemic indeed not only changed how we live and work, but also how we view and manage our finances. Is selling or purchasing a home during these challenging times a good idea?
The American Dream is alive and well, but before you decide to buy a house during the pandemic, consider these four factors.
Incredibly Low Interest Rates
It’s no secret that most home buyers consider interest rates before taking out a home loan. Mortgage rates are lower than ever before. How long will they stay that way? That’s difficult to determine. Much depends on the economy in general, as well as government actions and market forces.
If your decision to get the home of your dreams is influenced by affordability, buying power, then now may be a good time to invest in a new home and take advantage of the historically low interest rates.
Rigorous New Rules for Buying a Home
The pandemic has taken a toll on the finances of a lot of people. Consequently, when taking out a loan to fund a home purchase or renovation, you might find that the qualifying rules have tightened. Perhaps due to the potential instability of employment and other factors, lenders are finding new ways to assess risks, mainly due to the high numbers of people who lost their jobs.
Research mortgage options to find the best fit for your current situation. For example, if you have a low credit score, then mortgage loans for VA, FHA and USDA may be more appealing. This is where consulting with a trustworthy lender is the most strongly recommended. Know your buying power – don’t guess. You can reach out and schedule a consultation today (even virtually) with one of our Loan Officers.
Higher Home Prices
One of the impacts that the COVID pandemic has had on the industry is an increase in activity. In fact, the industry is booming, perhaps partially due to the appeal of low-interest rates. Another factor is that people are working from home and looking for a bigger space for a home office. The downside is that now demand is exceeding supply, driving prices up.
Many sellers are not sure if it’s wise to put their homes up for sale. Fewer homes on the market mean higher-than-usual prices. Competition for buyers is fierce.
The New Normal
The restrictions to curb the pandemic’s spread are making home shopping a bit different from what you used to expect. In places where physical tours are allowed, you will need to put on a mask and practice social distancing.
Virtual tours are a great option if you want to avoid contact all-together. However, you’ll likely want to take an in-person tour before making a final decision.
Before you buy a home amid the pandemic, consider all the factors highlighted above. Carefully consider your personal financial situation and do your research to find the best loan to fit your circumstances.
Start by talking to our expert staff to find the best mortgage at the best rates.