In light of the current COVID-19 situation globally, Real Estate and Economic experts report that the current spring trends for the Real Estate Market are off to a strong start. With a projected 4% increase in home sales this year, as well as the lower mortgage rates, REALTORS® will be busy this year working with home buyers to find their new home. Real Estate and Economic experts Diana Olick & Nadia Evengelou from the NAR® weigh in.
Spring Market Trends & the Mortgage Market
‘Economic activity early in the year usually provides useful clues about the future,’ states Evengelou. Since Mortgage rates are starting off in 2020 at an even lower rate than 2019, this is an opportune time for home buyers to take advantage of these low rates.
‘According to mortgage finance provider Freddie Mac, the 30-year fixed-rate mortgage dipped to 3.7% in the first two weeks of January, compared to 4.5% a year prior. Thus, mortgage rates started off the new year nearly 80 basis points lower than they were at the start of 2019,’ reports Evengelou.
The NAR is forecasting the 30-year fixed-rate mortgage to average 3.8% for 2020. Historically, the average mortgage rate dating back to 1972 is 8%. These low rates mixed with the unemployment rate being below 4.0%, and inflation hovering around the Federal Reserve’s 2.0% target allows for a stable interest-rate environment, which homebuyers are expected to benefit from in 2020.
With the low mortgage rates, homeowners have opted to refinance their homes into these new rates. ‘Applications for refinances jumped 79% for the week and are 479% higher than a year ago,’ reports Olick. This ‘marks the highest level of refinancing since 2009.’
Since the lower mortgage rates have led to a rise in both refinancing and home buyers seeking to take advantage of the lower than normal rates, Olick reports that ‘as lenders handle the wave of applications and manage capacity, mortgage rates will likely stabilize, but remain low for now.’ Economic and Real Estate experts suggest that now is the time for potential home buyers to take advantage of these rates.
Real estate activity
The National Association of REALTORS® forecasts based on spring market trends that home sales will increase 4% in 2020. Typically, the summer season has traditionally been the season where house prices are the highest, with activity slowing down in the winter. With the low mortgage rates, the NAR predicts that in 2020, this spring will be the busy period for buying, and typically, home buying increases before the summer to avoid the typical higher home prices. Evangelou reports that ‘sales activity between February and March typically increases 34%, and prices rise 3%.’
With low mortgage rates, 4.0% employment rate, and a typically busy spring season for Real Estate, the months ahead will likely be a busy period for REALTORS®. How these factors affect the local Real Estate market in the months ahead will be worth watching in 2020.
If you’re looking to relocate up to Ulster County, make sure you speak with a REALTOR® about navigating the home buying process. Learn more about the Ulster County Board of REALTORS® and find the right REALTOR® for you, contact us today!
