With the Coronavirus Pandemic still sweeping America, the economy could remain unstable throughout 2020. However, there’s one aspect of it that can provide stability and even new opportunities for some families. The 30-year mortgage rate is at a record low, making homeownership more accessible than it has been in recent memory.
Whether looking for a home or considering refinancing, now could be the best time to explore lending options.
Rates Stall in Uncertain Market
With consumers hunkering down for the pandemic and the slowed economy that it has created, mortgage interest rates have remained stable over the last two weeks.
According to Freddie Mac, the average 30-year home loan rate was 3.13% this week, the same as it was a week ago. It is also down from the 3.73% that was reported this time last year.
Buyers looking for a shorter term with more competitive interest can take advantage of the 15-year fixed-rate, with an average of 2.59%. The average was 3.16% at this time last year.
Is it Smart to Buy a Home in Today’s Economy?
Before the health crisis, America’s economy was still expanding, continuing the longest run of growth in modern history. Now statewide lockdowns have reduced domestic output. Millions have lost their jobs and filed for unemployment. Infection rates are increasing again, suggesting that the worst of the pandemic is far from over.
Consumer spending and home buying activity have fallen, but for families that are still generating income, now could be the perfect opportunity to invest in a home.
With mortgage rates so low, the total cost of homeownership is more competitive. Lower prices can also be found in some markets, as sellers are feeling the pinch of the economy with less buyer activity.
Sales of existing homes were down 9.7% in May.
Families with two incomes will find it easier to justify the decision in today’s economy. The job market hasn’t recovered from sweeping losses in the early days of the pandemic, but numbers in some industries did increase last month. Ultimately, buyers will need to decide whether they can risk the burden of a mortgage.
Home Buying Could Stimulate the Economy
Low rates are good news for all parties involved. Buyers gain the benefit of affordability. Lenders will see higher demand. Homebuilders and sellers will also benefit as the market continues to recover.
GDP growth will be negative in 2020, but a competitive home market could be a hidden gem within the otherwise poor outlook.
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