I am receiving countless questions from clients on how our current disturbance from the Coronavirus is affecting the real estate market. This time is like nothing our city or country has experienced, and the professionals in the real estate industry are doing their best to keep their clients informed and advised. Mortgage rates are literally going up and down every hour, and understandably the industry has been flooded with concerned home buyers and homeowners. While home buyers and sellers may want to delay plans on buying or selling, the truth is that fear has a tendency to lower mortgage rates and stimulate the housing market.
Last week was the most volatile week in the history of the lending industry, and the Fed stepped in on Sunday, March 15th to cut the overnight bank-to-bank and Fed-to-bank lending rate (not mortgage rates) by 1% to encourage banks to keep lending.
Here’s a brief summary of what has been going on:
- Mortgage rates hit all time lows on Monday, March 9, for most lenders.
- The average U.S. rate for a 30-year fixed mortgage fell to a record low of 3.29% during the week ending March 5, according to data from Freddie Mac.
- By Friday, March 13, rates had risen faster than they’ve ever risen in one week. On Sunday, March 15, the Federal Reserve announced a 1% rate cut.
Avoid crisis-driven decision making
It continues to be a great time to buy or sell a home in Austin, but it’s important to make sure you don’t choose to buy or sell based on fear. If buying or selling still makes sense for you in today’s market, you should still continue with your plans. Understand that builders in particular may be taking longer than normal due to closures of city permitting offices or slow down of supplies.
Rates should never be the reason to buy (or not)
No one knows if rates will further drop or if they are going to spike. What we do know is rates are very attractive for home buyers during this time. We are seeing mortgage rates in the low 3% range on a 30-year term (depending on credit, down payment, etc). If you find a home you love with conditions you are comfortable with, you should still act now. Don’t bank on the hope that rates may drop further.
Have a voice of calm available to you
An experienced real estate professional is well equipped to help their client’s handle the emotional roller coaster of home buying and selling. With our world currently feeling unstable, it is so important that you have help for your individual situation.
Let’s all work together to do our part during the next few weeks! Be safe, and healthy out there!