Spring is typically one of the busiest times of the year for the housing market. Yet, as COVID-19 began to have an impact on day-to-day life and business in the United States, it also started to influence housing market trends. If you’re still looking to buy or sell a home, things might look a little bit different than they did a few months ago in the housing market. Aaron Tyler, (NMLS #130688) a U.S. Bank Mortgage Loan Officer, gives his insights on the latest market trends he’s been seeing since the onset of COVID-19.
While home listings begin to ramp up in March and April, there’s a bit of a delay with availability due to COVID-19. “There’s definitely not as many homes as we would normally see. We’ve seen a pause as buyers aren’t allowed to tour homes in-person and realtors are delayed on putting up listings because photographers, painters and stagers aren’t allowed to work right now,” says Tyler. When can buyers expect to see a wave of new listings? Hopefully as soon as May. “What we may see is our purchase season, instead of being during the springtime rush, will push into the summer,” Tyler says.
The Great Recession that affected the housing market over a decade ago saw a sweep of foreclosures. This time around, the prediction is there won’t be as many, and it won’t happen as quickly. “One of the first things the government did was see to it that mortgage customers could receive payment suspensions,” Tyler says, “It’s bought people time to see how this plays out, and those payment suspensions can last up to a year. We’ll have a better idea in spring of next year and it will depend on what we see with the economy.” Differences between the Great Recession’s housing market and the current housing market are apparent, however, there are similarities as well and both banks and the government have been adapting quickly to them. “The industry has shifted quite quickly. Guidelines are getting more restrictive, and there’s a temporary adjustment while we watch the markets. Lenders are much more experienced now and they’re putting protections in place,” says Tyler.
If you’ve been in the market for a home and excited about the prospect of buying, the effects of COVID-19 aren’t all discouraging. While he stresses that all fiscal and personal situations vary from homebuyer to homebuyer, if someone is in a strong financial position, this can be a great opportunity to buy a home. “The rates on purchase transactions are some of the lowest I’ve ever seen and you can buy more at a lower rate,” Tyler says. Besides competitive rates, the market is starting to shift from a seller’s market to be a bit more flexible. One piece of advice is to be up front and communicate any potential employment shifts you’ve encountered during COVID-19, whether that’s being furloughed, having your salary cut, or unemployment. “Being very up front about their situation can help us understand how it might impact them in the long run with a loan. Having an abundance of communication means we can come up with solutions,” Tyler says.
If you feel financially secure and ready to buy a home but you’re worried about in-person contact, know that much of the home buying (and selling) process has gone virtual. “A lot of the process has gone virtual,” Tyler says, “People want a personal connection and feel comfortable having someone to talk to, but they want the convenience of accessing it through technology. There’s a balance we’re finding that’s both virtual and personal and it’s a very powerful combination.”
As the rest of the world changes and adapts to COVID-19, so too does the housing market. Being aware of the latest trends and potential pros and cons of purchasing or selling a home is important before making a decision. “If it’s the right time for you and your family, if it’s where you’re meant to be and you can ride this economic drop out, it can be a great opportunity right now,” says Tyler.
If you have questions about home buying, we’re here to help. Find a mortgage loan officer near you.
Navigate your financial well-being throughout the COVID-19 situation here.