The panic surrounding the coronavirus outbreak has caused widespread economic upheaval. Stock markets have crashed, companies from all across the country have shuttered operations and laid off employees, and many are predicting that a major recession (or even a depression) will soon be upon us. So, it might sound counterintuitive to consider buying a home right now. But, even if you have never bought a home before, there are good reasons why now is the right time to get a mortgage.
Mortgage Rates May Never Again Be So Low
In response to the falling stock market as well as to the economic havoc caused by the coronavirus outbreak, the U.S. Federal Reserve recently cut the interest rates that banks pay to borrow money to as close to zero as they will likely ever get. At the same time, 30-year fixed-rate mortgages have fallen to as low as 3.29%, with adjustable rate mortgages being even lower.
What does this mean for a new homebuyer?
It not only means that your mortgage payments will be lower than before. It also means that you will be able to afford a more expensive home than what you could have afforded before this crisis happened. So, if that dream home you wanted has always been just out of your grasp, it now may be finally within your reach.
But these rates will not last. Once the current crisis has passed and the stock market has calmed, you can be certain that the fed will again raise interest rates, which, in turn, will lead mortgage rates to rise as well. With this, a golden opportunity to become a homeowner may pass you by.
There is Less Competition from Other Buyers
Prior to the coronavirus outbreak, real estate experts were expecting a robust market for homes this spring. With available homes currently in short supply, this would have caused increased competition, further driving up already high prices and leading to bidding wars that are usually not so favorable to new homebuyers.
But, along with the current panic, there are less people looking to buy a home. On top of this, many realtors have stopped doing in-person home tours and home sellers have stopped holding open houses, all due to the dangers of contracting the virus. This means that you now may be able to nab a home that you could not have done before.
However, if you wait until the fears over the virus have passed and the economy is on better footing, you just may find yourself priced out of that home you wanted.
A Home Will Provide You with Stability in Uncertain Times
According to Lynwen Hughes, the vice president of Deasy Penner Podley, “When there’s financial uncertainty, buyers turn to real estate as a safe haven.”
While there likely will never be another event quite like this coronavirus outbreak again, there will certainly be times of economic uncertainty in the future, such as recessions. Owning a home provides you with an asset that you can always count on, regardless of what is going on in the economy or in the stock market. It is also an investment that, over the long haul, will not only hold its value but also build upon it.
So, if you are feeling insecure during this crisis, buying a home could be just the thing to help you get over it.
You should not let the current panic surrounding the virus deter you from obtaining your dream home. While others hesitate, you could seize upon an opportunity that may not be around once the panic has subsided.