What to Consider When Buying a Home in 2020? Homebuyers looking to purchase in the spring of 2020 will be faced with a true challenge if they are looking to find a dream home. Shortened inventory in the housing market should cut options of variety in real estate. That is why new homebuyers should approach the matter with caution. The best option, if applicable and possible in individual cases, would be to postpone home purchases for spring 2021. Home prices are at record highs, which might be another reason to postpone buying a house.
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Is It a Good Time to Buy a House Now: Coronavirus and 2020 Housing Market Predictions
Spring is normally the busiest season for homebuyers and home sellers alike. However, the spring of 2020 has brought an unexpected turn of events with the COVID-19 outbreak paralyzing the market and economic growth. Buyers looking for new homes will have a rough time in 2020 as the housing shortage is touching record lows. At the same time, interest rates are also touching new lows in the spring of 2020 with a growing number of borrowers and mortgage users filing forbearance requests.
There is a Large Number of Millennial First-time Buyers
Chief economist and senior Vice president at Haus analytics, Ralph McLaughlin, claims that there is a lot of Millennials looking to purchase homes as first-time buyers. McLaughlin further claims that even though the situation in the housing market is not the brightest by far, it certainly isn’t the worst-case scenario when compared to the Great Recession in 2008. As McLaughlin stated, 2008 was an anomaly that shouldn’t happen again.
Housing Predictions: What Will Happen to the Housing Market in 2020?
Haus’ McLaughlin predicts that the housing market should see a slight rise in inventory in the summer of 2020 after steep declines noted in spring. The declines could return in the fall of the same year. The Haus’ Vice president and Chief economist forecasts that the situation will improve and achieve balance and stability in the spring of 2021. The demand for homes should drop in summer with new homes available in the market, which should be followed by another drop in the fall and for most of 2020.
Home price appreciation has slowed so far but prices are still rising
According to MarketWatch report; The coronavirus pandemic sent shock waves throughout the real-estate industry. But does that make now a good time to put in an offer on a property? The answer to that question will largely depend on what you plan to do with the home — particularly if you’re an investor. “It’s a good time to buy an investment property if you can find inventory at a good price,” said Daren Blomquist, vice president of market economics at real-estate website Auction.com.
Another factor making it harder for people to score a deal on an investment property: The lack of foreclosures, due to foreclosure moratoriums. “We’re seeing many investors who primarily acquired at the courthouse foreclosure auction migrate to buy bank-owned (REO) homes via online auction, which also provides the added benefit of allowing them to buy with no in-person interaction,” Blomquist said. The added competition for these homes could drive up the prices.
But investors in the housing market should also consider their end goal. Those looking to buy a home and hold onto it in the long term, particularly as a rental property, won’t face as much risk. Indeed, 64% of investors who primarily buy investment properties as rentals said they planned to increase or keep their acquisitions, despite the pandemic, according to a recent survey from Auction.com.
If you’re confident about your employment status then it’s a good time
While we can’t make that decision for you, we can tell you that it may still be a good time to buy if your job is secure and you have a steady income. Here’s why. According to homeownersfg.com; After a decline in mortgage applications due largely to the stay-at-home orders issued throughout most of the country at the beginning of the pandemic, applications for home purchases have risen every week since mid-April. They were up 11 percent for the week of May 8, a signal that many buyers are ready to resume their home search during the spring buying season.
According to realtor.com’s 2020 Housing Market Forecast, home prices are expected to remain flat for the rest of the year and interest rates recently hit a new record low, which could make buying a home more affordable.
If you’re concerned about safety, you’re not alone. Many realtors have implemented practices to help keep home buyers and sellers safe amidst COVID-19. The number of people allowed in a home at one time is limited, social distancing guidelines are being enforced and virtual 3D “tours” of properties are available. Plus, digital mortgage applications and tele-notarization options in some states provide even more ways to keep you safe throughout the home-buying process.
